Rogers introduces credit card scheme to improve cellphone sales through extended payback
Rogers Communications is announcing Monday the launch of a cellphone financing strategy the company says will be a “fundamental shift” in the way customers can purchase their devices.
Rogers Mastercard customers will be able to finance phones on a 36- to 48-month plan, with the option to pay them off at any time.
The company’s president of wireless, Phil Hartling, said the idea will “open up” the appeal of their wireless services while easing costs to customers at a time when the price of new devices can reach $2,000.
“That’s a very expensive purchase for people,” Hartling told the Star. “Even today if you finance it through your carrier, it’s a 24-month term, you’re going to be paying $40 or $50 a month.”
The plan isn’t subject to government regulations which cap the maximum length of a wireless contract at two years. That’s because customers are purchasing a phone through their Rogers credit card rather than a phone through a Rogers wireless plan.
The strategy offers zero per cent financing and no requirement for a Rogers mobile contract.
The credit card comes with a two per cent cashback feature with customers able to use that money to pay a Rogers phone bill. It also has a 30 per cent cashback bonus. For example, a $100 cash back value would be worth $130 if used to pay for a Rogers product or bill.
The announcement comes a day before Apple is expected to release its latest version of the iPhone Tuesday.
A ‘fundamental shift’ in mobile industry
As interest rates, inflation and other economic hardships have hit Canadians hard, the idea of signing up for another credit card may be daunting for many but Hartling said a soft launch of the program at retail outlets in recent weeks has shown encouraging results.
“What the sales reps have told us is that it’s actually quite an easy conversation with customers,” he said. “It’s easy because we’ve connected the value proposition of the card and the mobile service.”
He said the new plan will likely be received well by new Canadians and students, both in need of a credit card and cellphone.
Hartling said he knew of no other telecom company in the world taking the approach and expects others to be watching the strategy. He said the idea represents a “fundamental shift” in the industry.
“Nobody really has set up a bank the way we have,” he said. “I think there’s always been interest in this idea.”
Rogers applied for a federal banking license in 2011 and was allowed to issue credit cards in 2013. At the time, the company said it planned to focus on credit, payment and charge card services.
Earlier this year, Rogers completed its merger with Shaw. As part of a side deal, Shaw’s Freedom Mobile service was sold to Quebecor subsidiary, Videotron. Quebecor has said it intends to offer stiff competition through its acquisition of Freedom.
Rogers had already cut costs for some of its fastest cellphone plans in May after it closed its deal for Shaw. It has also rolled out a plan to offer its 4G customers access to 5G at no cost.
At the time, Rogers had about 11 million customers in Canada compared to about 10 million each for Bell and Telus. Freedom mobile has about three million wireless customers. Rogers now says it has surpassed 11 million customers.
This article was reported by The Star
