Bank of America Merchant Services is launching a Web portal to allow its merchant clients to offer daily deals through search engines, social media sites and other online forums.

Through an arrangement with 2Go Media, the more than 300,000 of the processor's clients can distribute daily deals and other promotions. Merchants can access 2Go Media's iDeals portal through the Bank of America Merchant Services website to create promotions for a specific deal or in-store event taking place.

In turn, iDeals distributes the information to various sites across the Internet, including social networks and shopping directories. After the merchant creates a promotion, it can opt to use First Data Corp.'s Offerwise software to link the deals to a consumer's payment card for automatic offer redemption. (Bank of America Merchant Services is an Atlanta-based joint venture of Bank of America Corp. and First Data.)

"With iDeals and Offerwise, we did not want to become just another daily deals or coupon offers program," says Trevor Rubel, executive vice president of Strategy and Emerging Products at Bank of America Merchant Services. "We wanted to give our merchants access to a large number of deals networks."

Merchant Services tested iDeals in a pay-to-use format, Rubel says, but ultimately decided to offer it free to all of its clients. The venture charges a marketing fee when deals are redeemed.

"Merchants only pay when the offer is successful," Rubel says. Otherwise, they benefit from getting free advertising, he adds.

The merchant can link promotions to any consumer payment card through the Offerwise engine, Rubel says. "It may be a card link that benefits the consumer, or it may be one that benefits the merchant," he says. "The link can be to any type of card, maybe even a prepaid card."

The connection to a payment card "gives us a great way to make our marketing more accountable," he adds.

Providing merchant clients with options to offer daily or periodic deals is becoming more common in the payments industry.

In April, MasterCard Inc. announced it was establishing a daily deals option for merchants through Chicago-based Local Offer Network. 

Similarly, Fiserv Inc. is planning to add a "Groupon-like" daily deals component to its UChoose rewards program offered through many banks. 

But as a number of "deals" sites and systems come into place, some will miss their targets because merchants and consumers may not find them suited to their needs, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.

Bank of America Merchant Services wants to provide a full set of offers for merchants and consumers because they understand that payments are changing, Luria says.

"What motivates consumers to use a particular card is evolving," Luria says. "Offering discounts and promotions can help to get the consumers' attention and, ultimately, help them decide which provider they intend to use."

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry