Jun 18, 2006

Something a merchant’s private label loyalty card will never be able to do

Here is something a merchant will never be able to do with a private label card, and which could only work with a general purpose credit or debit card.

Imagine you are a top executive managing this chain of petrol stations. How would you like to know that this person that is filling up right now, here in this picture, has been to one of your stations before, but the last time was over 30 days ago? So the customer is probably filling up somewhere else in the meantime. How would you like to print a special offer at the bottom of the customer’s credit or debit card receipt, right now, inviting the customer to come back in the next couple of weeks, fill-up again and get a half price car wash? Or a free coffee? Or a special, low cost car wash plus coffee combination?

The customer will obviously not be paying with your private label card, since they are not a frequent and loyal customer. They will be paying with a general purpose credit or debit card. If your payment service has real-time promotional marketing capabilities built-in, it is very easy to make this kind of offer. Your acquirer, or whoever provides the payment service to you, asks if you want to use this feature, and you simply provide the infromation on the promotional offer you want to make. No need for anything else. No database management systems, no mailings. Nothing but payment services.

Imagine how difficult and expensive it would be to accomplish the same thing without this feature built into the payment transaction. You would have to buy lots of databases and try to mine through them to identify people who are likely to come to your petrol stations, but who are not already frequent customers. Then you would have to send out a mailing to each person. What a waste. And what a tremendous opportunity for banks to modernize their payment services, make payment much more useful and attractive for merchants, and protect all that interchange revenue.

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