Tim Hortons to launch credit card through mobile rewards app

At a Tim Hortons drive-through window in Mississauga, Ont., on March 17, 2020. (Nathan Denette / THE CANADIAN PRESS)

TORONTO — Tim Hortons is launching a credit card that can be used through its mobile app, the latest move into an increasingly competitive rewards space.

Tims Financial is a new division of Tim Hortons that will offer a no-annual-fee Mastercard powered by Neo Financial, the company said in a press release Wednesday. The card will be launched in the coming months, but interested customers can sign up for a waitlist on the Tims Financial website.

Customers will be able to earn Tims Rewards Points on most purchases, including on many gas, grocery and transit purchases, and extra points at Tim Hortons restaurants.

"There's millions of Canadians who are actively seeking better and accessible financial products," said Markus Sturm, senior vice-president of digital, loyalty and consumer goods at Tim Hortons, which is owned by Restaurant Brands International.

The Tims Rewards app already has features like mobile order and scan and pay, making a new payment option the logical next step, said Sturm.

Other companies have also been pushing further into the intersection of rewards and credit cards to build customer loyalty, including BMO's recent purchase of Air Miles, while Scotiabank has been expanding its Scene Plus rewards program in partnership with Cineplex Inc. and RBC relaunched its Avion Rewards program last year.

Canadian Tire rolled out its Triangle Mastercard rewards program a few years ago and in March announced a paid tier offering further enhancements to the program.

Tim Hortons will also offer a second version of its credit card aimed at students, newcomers and others with limited or no credit history.

This secured credit card will earn Tims Rewards Points and may help users build their credit, the company said.

The credit card management will be fully embedded into the existing rewards app, said Sturm, including applying for the card and viewing statements. However, customers can also load the card to a digital wallet like Apple Wallet, he said, and they can also receive a physical card.

Almost five million Canadians are using its app every month already, Tim Hortons said in the release, and the company believes its new card will be an attractive option for many of them.

Brands have been increasingly offering not only rewards programs but also linked financial services and credit cards, but Sturm said he thinks the Tim Hortons rewards program stands out because of the accessibility of its rewards. Instead of saving up for what he calls more aspirational rewards, Tim Hortons customers can easily rack up enough points to get a more tangible, practical reward like free coffee or food, he said.

Retail analyst Bruce Winder said while the market for rewards programs and linked credit cards is "incredibly crowded," the Tims Financial launch sounds interesting.

"I don't think it's a bad move," he said.

"I think it's bold, and we'll see what happens with it."

Launching rewards-linked credit cards can be a lucrative play for brands if it goes well, said Winder, with more opportunities to gather data and incentivize brand loyalty.

Tim Hortons wanted to offer an inclusive financial product for people with limited or no credit history, said Sturm.

"We want to support them just like we do in fuelling their day with coffee and beverages and food," he said. "We also want to fuel their growth to financial prosperity and give them options to help build their credit."

The secured credit card may actually be what helps the program stand out among competitors, Winder said, as students and new immigrants to Canada will likely be interested.

"Any time you can get a differentiator from your competition, it's very valuable," he said.

But the mainline credit card might be a harder sell amid the noise, he said.

"How many credit cards do you need?" said Winder. "It starts to get just too much ... you've got everyone with their own credit card."

The Tim Hortons rewards app was in the spotlight around a year ago after an investigation by federal and provincial privacy watchdogs found the app had violated the law by collecting large amounts of location information from customers. The app was found to continually track users regardless of whether they were using it, though this practice stopped in 2020. Tim Hortons agreed to implement recommendations that it delete remaining location data, establish a privacy management program for apps, and report on measures it took to comply with the recommendations.

Sturm said the company has made a lot of changes since the report to strengthen privacy through "highly reputable external partners" and an internal review, as well as improving communication around the company's privacy policy, which has also been updated.

"Everything that we've done for Tims Financial has taken all that progress into account and frankly added additional security and safety measures," he said.

Despite the data issue, which could deter some people from getting a credit card with the restaurant, Winder said Tim Hortons has an overall healthy brand that people trust, and many people go there daily.

"Time will tell," he said. "Great brand, massively powerful in Canada, and we'll see how this works out."

This report by The Canadian Press was first published June 7, 2023