From 1 December, Discovery Bank clients using physical credit cards – i.e., plastic – will earn a so-called “base rate” of just 1 Discovery Mile for every R100 spent, regardless of the type of account they hold or their Vitality Money status. The changes were announced by the bank in the past week. It says this base rate is “not changing”.

From next month, earning Discovery Miles at a better rate than (effectively) 1% will require account holders to use their virtual cards for in-store and online purchases.

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Virtual cards are more secure than physical ones as they are stored within the banking app and have a CVV that dynamically regenerates hourly. And crucially, they can’t be cloned at a point-of-sale because they’re virtual.

Adding a virtual card to a virtual wallet (like Apple Pay or Samsung Pay) enables one to tap and pay with a smartphone or watch. This has significant benefits for banks, where card fraud totalled R1.7 billion in 2021, according to the South African Banking Risk Information Centre (Sabric). Card fraud totalled just under R1 billion in 2022.

Banks have been driving down incidences of credit card fraud in particular, with this 26% lower in 2022 versus 2021.

Card-not-present fraud, where the victim’s card details are used for an online purchase, accounts for three-quarters of all credit card fraud in SA.

There is no change to the underlying earning rates across its various bank accounts. This rate is dependent on one’s Vitality Money status. However, earning at these rates will now require the use of a virtual card.

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To most account holders, this way of displaying the earn rate would be downright confusing. Who calculates reward miles based on a factor of how many rands they’re spending?

Another, more helpful, way of illustrating this is an actual percentage. In other words, for every R1 spent, the percentage of Discovery Miles you would earn.

Discovery’s biggest selling point for Miles is that they can convert to cash. With most other rewards programmes – especially its largest direct competitor, FNB’s eBucks – this is not possible.

Additionally, discounts of up to 20% are available from partners based on your banking behaviour. Vitality Money earns you 5% as does holding a Bank Suite (a bundled bank account). But a salary or minimum monthly deposit is required to unlock a further 5% discount, and a new spend requirement (using a Discovery card) also unlocks 5%.

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The discount amount is doubled on Miles ‘D-Day’, which occurs on the 15^th of each month (and on Black Friday).

(Previously, customers would get 5% for each Vitality Health, Vitality Drive and Vitality Money, with an additional 5% if they have a Bank Suite account.)