London-based technology company Birdback is bringing its card-linking platform to the U.S., where card-linked offers have been gaining momentum for several years.
"Card numbers aren't going anywhere as the underlying basis for a successful payments system," said Nicolai Watzenig, co-founder and CEO of Birdback.
The platform, which works on existing payments infrastructure, virtually links offers to a customer's card; consumers don't need to print out paper coupons or download a third-party app to redeem the offers.
Birdback has already made headway in the U.K.. It partnered with Zanox, an affiliate marketing group in Europe, so that hundreds of retailers can set up card-linked offers quickly without the help of a specialist. Birdback uses an application programming interface, which allows companies to easily implement the program in just a couple lines of code.
But the North American market is still lacking of ubiquitous card-linked offers platforms, Watzenig said.
"What distinguishes the players in this industry is the ability to keep rewards programs relevant and defined by the market," said Brian Riley, research director at CEB TowerGroup.
Cardlytics, for example, has a huge staff of people that can go to local merchants to generate offers. "You don't want all national offers on the program," Riley said. But to keep offers fresh, these programs are high-maintenance, he said.
Birdback company is also launching its platform in Brazil. While Brazil is a younger market, it's turned its attention to card-linked offers in an effort to future-proof itself against "fleeting trends in hardware and tech," said Watzenig.
Birdback has already established partnerships in these two regions, said Watzenig. "The fact is, every online retailer needs an offline story now and creating the connection between those two worlds without adding complexity is really challenging," he said.
The Dodd Frank ruling to slice interchange fees three years ago was a big driver of the popularity of card-linked marketing. After the ruling, most card issuers shut down their points programs.
One of the challenges facing card-linked offers programs is that consumers are unaware they're being offered and some think the offers are long-term or permanent. But as these programs gain popularity, payment companies could start seeing significant benefits. Nearly 50% of customers between 26 and 34 say they're likely to switch banks for targeted offers, according to a 2014 whitepaper by Cardlytics.
The best programs also keep the amount the customer is saving or has saved through the program right in front of the consumer, said Riley.
"Previous card-linking platforms have been extremely limitedeither supporting only one bank's customers or users of one payment provider or retailer," Watzenig said. "This has held back adoption of card-linked offers and innovation."