Live From Money 20/20 – Card-Linking: Moving to Scale
Mix financial services firms with advertisers, some merchants and a little reward program insight, and the result is one of the fastest-growing concepts in loyalty: card-linked services.
Eight of the largest 10 financial institutions are using some form of card-linked services, Silvio Tavares, CEO of the CardLinx Association, told gatherers at Money20/20 in Las Vegas Nov. 3. When those banks were asked if merchants are using the service more this year than last, 100% said yes.
Card-linked services enable consumers to enroll their credit or debit payment cards in a reward program and in return they get advertisements or offers, typically online or by mobile. Consumers purchase the promoted products, paying as they usually do with a card or mobile app, and the discount is automatically applied. The key appeal is its seamlessness: No need for paper coupons or promotion codes.
Assembled with some of the biggest brands in finance, from MasterCard and Bank of America to Facebook and Microsoft, Silvio moderated a panel that explored the accomplishments and future of card-linked services.
At Bank of America, 80 million cards are card-linked-enabled and 30 million people are active in it. “It’s moving to scale, standing itself up and getting there,” said Jason Blackhurst, senior vice president of payment strategy and emerging commerce at Bank of America. “The consumer got it quickly but convincing merchants took more work. But in last year we see they are starting to see how it works.”
Linkable Networks, which links media and loyalty programs to the point of sale, enables the supermarket chain SuperValu to extend its own card-linked offers. “We’re scaled across thousands of their stores,” said Tom Burgess, CEO of Linkable Networks. This means regular shoppers can link their own desired coupons to their cards – a dollar off a box of macaroni and cheese, for example.
Such partnerships are leading financial institutions to a tipping point in terms of card-linked services, said Schwark Satyavolu, global head of rewards and offers at MasterCard. As with any major innovation it is still at the early stages, he said, however, with the consolidation of players, the movement will expand. “Going forward it is diversifying beyond banks,” he said. “Diversification of channels are all kicking in.”
For example, Satyavolu added later that while linking rewards programs to point-of-service redemptions is not a traditional card-linking model, it should be considered. “There is a substantial amount of new innovation.”
P. J. Linarducci, manager of payment partnerships at Facebook, agreed that all parties stand to gain from collaboration. “I can see a vision of the future where all of us benefit,” he said. “Billions and billions of times a day we get opportunities to pair consumers with relevant information. And for our paid business, we want to serve highly appropriated content.”
Which may lead to a change in how offers are paid, perhaps requiring advertisers or media to help foot the bill, surmised Neil Bernstein, senior director at Microsoft. “Brands pay for card-linked offers upon redemption. That is the typical model but it will shift,” he said. If advertisers and media do get involved, it can escalate card-linked services to a hundred-billion-dollar industry. “That is where all of these pieces are heading. We are dying for it,” he said. “We’re all all consumers, too. We think this is fantastic.”
In closing the panelists agreed that card-linked services have taken consumer convenience to the next level. The onus, now, is on all the converging players to work together to further enhance that experience.