Page 28 - Pay Magazine s2014

digital money
Powering Prepaid Loyalty
the network used social media— including Facebook, Twitter and Foursquare—as its primary engine to promote o ers. Those e orts resulted in increased consumer engagement and deal redemp- tion, American Express reported.
And because redemption is where the value comes in loyalty, it’s im- portant to ensure cardholders can redeem rewards at merchants and brands they’re interested in—and that the redemption process is as seamless as possible. For prepaid cardholders, essential items like groceries and gasoline are particu- larly attractive. Indeed, a recent Ipsos study of consumer reward preferences found that fuel dis- counts outranked even cash back as the most-desired reward. Serve’s rewards include discounts at Exxon gas stations and casual dining restaurants, with deals automati- cally applied when cardholders pay with Serve and subsequent dis- counts applied to their accounts.
Leverage the Data
Like all payment card issuers, pre- paid providers have access to a wealth of data on how customers use their cards. They should lever- age that data when designing their loyalty platforms.
“Cardholder shopping and card usage habits are a great tool for nancial services providers to enhance their programs and o er- ings,” says Randy Koch, CEO of ARM Insight, an analytics and big data rm focused on the payments industry. “Prepaid cardholders are
When customers start receiving their tax refund cards
in January and February, rewards engagement in- creases rapidly.
So that’s the
time for prepaid providers to send out their most relevant content— and lots of it.
—Fred Rolle, Cardlytics
receptive and reactive to rewards, and the right reward o erings will change behavior. For example, we o er sweepstakes to win an iPhone for prepaid cardholders who use signature transactions instead of PIN. That drove a 10 percent in- crease in signature transactions— and therefore more revenue to the banking institutions.”
One example of how transaction- generated data can lead to action- able insights is in cases where
consumers receive tax refunds on a prepaid card. Cardlytics found that those cardholders spend 50 percent of their post-return spend on home and family purchases— meaning card providers looking to capture loyalty of those consumers should partner with and promote o ers from merchants like big box stores and supermarkets.
Overall rewards engagement during tax season outpaced regular network averages by as much as
138 percent, according to Card- lytics. To capitalize on seasonally speci c opportunities like tax season, prepaid providers need to get the word out about loyalty o ers early on, says Rolle.
“When customers start receiving their tax refund cards in January and February, rewards engagement increases rapidly. So that’s the time for prepaid providers to send out their most relevant content—and lots of it—so customers keep reloading their cards after tax season has ended,” Rolle says.
More Options Ahead
As GPR products continue to be- come more prevalent and widely used, GPR-linked loyalty programs are likely to follow, possibly adding the types of rewards and o ers commonly seen in traditional pay- ment cards. “Over time, as competi- tion increases and prepaid cards become more mainstream, perhaps trends from credit and debit will become more applicable, such
as acquisition bonuses like rst- purchase discounts and promotional
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