As we discussed in my last post, there are three essential elements of loyalty; 1. Enrollment; 2 Engagement; and 3. Redemption. Today we discuss card linked enrollment for a merchant’s loyalty program.
There are two types of card linking loyalty options; terminal agnostic and terminal integration. Terminal agnostic is 100% in the cloud and does not touch the terminal. In fact that is a major benefit of terminal agnostic card linking. The card brands, MasterCard and Visa are offering to marketing platforms, card linking solutions that integrate with loyalty solutions, like the BP card linking loyalty solution recently rolled out. But there is one drawback with terminal agnostic card linking; enrollment is too hard.
Convincing a shopper to go online and provide a credit card number for a single merchant’s loyalty program is hard. While an advocate of a major brand like BP may go online and enroll, the average customer for an average merchant is not. It is just too hard.
Another terminal agnostic card linking enrollment option is to first ask the customer to download a mobile phone loyalty app for the merchant’s loyalty program, and then if the app is downloaded, second ask the customer to set up an account in the app, and third, enter their credit card for the loyalty program.
The problem here is that the average smart phone user already has 26.7 apps on the cluttered phone. Remember share of wallet? Now there is a share of mobile phone screen space. The app is probably not getting downloaded. The other issue is that 70% of the total usage is coming from the top 200 apps. (Nielson 06-11-2015) What are the chances the customer will take the time to download the loyalty app just to link the credit card to the merchant’s loyalty program? There is another way.
Terminal integrated card linking excels at enrollment, and here is why. When the customer pays with a payment card, a card linking platform like vPromos in real time can see if the payment card token is in the loyalty program. If not, a message like the one above is sent to the terminal, prompting the customer to provide a secondary unique loyalty identifier like a mobile number.
Before EMV, trying to integrate card linking with point of sale systems was hard. There were just too many POS systems to integrate with. And POS systems were notoriously unwilling to make it easy to integrate because of PCI requirements.
After EMV, the payments landscape is changing. Now most POS companies are no longer processing credit cards. That responsibility of credit card processing is left to the terminal companies. There are just a handful of terminal companies, and these companies are entering the card linking space. For example, Verifone, the terminal leader in the US, is taking the lead in the terminal space with its Card Commerce initiative which will enable terminal integrated card linking. Terminal integrated card linking is about to take off in 2016.
What are your thoughts about how to take advantage of terminal integrated card linking?
Jeff Mankoff 