Elavon's clients now have the option to add a customer loyalty program directly into their payment transaction systems, enabling shoppers to redeem rewards any time they make a payment.

"We decided the easiest way for both the consumer and business was to completely integrate loyalty and rewards into the payments stream," says Marianne Johnson, Elavon's executive vice president of global product and innovation.

The new system, called Fanfare, is designed for small to mid-size merchants. Their customers can sign up for loyalty programs and redeem rewards at the time of purchase or during a future visit to the merchant.

Consumers would be alerted of a merchant offer or reward through a message or e-mail to their smartphone while at the point of sale, eliminating the need to print coupons, carry a loyalty card or wait to see a rewards point balance on a credit card statement.

Offers are applied instantly at the point of sale. "If the bill is $100 and the offer is for $10 off, then the transaction will process only $90, so the consumer has the savings right then and there," Johnson says.

Elavon, a unit of U.S. Bancorp, is initially launching Fanfare to its U.S. merchants, with plans to offer the service in European markets later this year.

Elavon provides Fanfare as a white-label service so the consumer views it as the merchant's program. "We were looking at different offer platforms out there, and many were stand-alone or branded to a third party, and they were disjointed or disconnected from the actual payments stream," Johnson says. "Some were redeemable at the POS, some were not."

Consumers can enroll in the program at the point of sale by providing their phone number or payment card information to the merchant, Johnson says. Afterwards, consumers can manage their accounts from Elavon's Fanfare website.

Merchants operate the program through a Web dashboard that tracks activity hourly, daily, weekly and monthly, Johnson says. "They can see exactly what is happening and how the program is performing."

As the merchants absorb that data, it allows them to customize offers or determine which ones work best overall.

"Small businesses don't have the time or expertise to do data analytics," Johnson says. "This is simple to follow, but provides effective use cases about how to run and grow the average ticket price and get recurring business."

Elavon's program is a reaction to a market demand for more distinctive products, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.

"Processors definitely feel a need to create value-added services because their products are becoming increasingly commoditized," Luria says. "They need to create value-added services for their merchants in order to not have to compete just based on price."

Fanfare is an attractive option for smaller businesses, Luria says. "Being able to integrate loyalty into payments is a thing that a lot of retailers want to do, or are trying to do themselves, but they want help doing it."

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