A partnership between First Data Corp. and CardSpring to create open redemption platform called OfferWise is more about making physical payment cards intelligent than it is about generating digital wallet use.
The companies announced their agreement Feb. 28 (see story).
OfferWise, which uses CardSpring’s application programming interface, enables online publishers that host coupons and loyalty program offers to attach the offers to consumers’ digital wallets. But its largest short-term impact will be through attaching the offers to traditional credit and debit card transactions, Sarah Owen, First Data vice president of personalized marketing and loyalty, tells PaymentsSource.
If a restaurant, for example, makes its coupons available on Yelp Rewards, a consumer could attach the coupon to any card through the Yelp Rewards website.
To illustrate, a consumer goes to a publisher site and considers restaurants that have offers with links that say “Add To Card.” Once the consumer clicks one restaurant, the site prompts the consumer to type in the number of the card it wants the coupon attached to, as well as a mobile phone number, so the publisher can text the user upon redemption.
The last action is to click “Add Offer To My Card.” The coupon activates when the consumer uses the card to pay. Consumers and merchants need not change anything for a card loaded with offers to work, Owen says.
OfferWise brings the power of applications to the payment network, much like smartphone application programming interfaces enabled mobile-application innovation. For example, developers of applications for smartphones need application programming interfaces to attach their applications to smartphones.
Merchants can work with any publisher they choose, storing the offers they attach to cards or wallets. Consumers would get the attachments through such publishers as Facebook, Yelp, Groupon, bloomspot or Foursquare.
CardSpring CEO Eckart Walther tells PaymentsSource OfferWise enhances payment vehicles, regardless of whether the vehicle is a digital wallet or a plastic card.
“We’re trying to make those boring old plastic cards intelligent,” Walther says. “‘Wallet’ is becoming a term reserved for ‘another way to pay,’ and that’s the one thing our [product] doesn’t do. It doesn’t pay, but it makes plastic smarter.”
The revenue model is transaction-based, dependent on different transaction types, such as per notification or per redemption, Owen says. “Our clients right now are the publishers and the application developers,” she says, declining to discuss specifics. “They will embed this technology in either a new application they provide to consumers or enhance an existing application they provide to consumers.”
First Data is partnering with a publisher and several merchants during a soft launch in a major metro area; the launch presentation says “broad availability in May.”
“It is going to prove out consumer usability and show the story of how the publisher can take advantage of this technology in a real-world environment,” Owen says.
Megan Bramlette, director at Auriemma Consulting Group Inc., tells PaymentsSource the challenge that faces digital wallets–consumer acceptance–is a function of the ease and widespread acceptance of physical card payments. OfferWise leverages that.
“The big hurdle is that traditional plastic-based payments are elegant,” she says. “It’s an elegant, it’s an efficient, it’s an effective transaction. There’s not a whole lot wrong with it, but it’s not in my phone. It’s a challenge that this (mobile-payment) industry is going to continue to face.”
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