FNBO Direct, a division of First National Bank of Omaha in Nebraska, and Cardlytics this week announced the launch of a digital rewards program that enables consumers to access merchant discount offers directly from their online bank accounts.
The MyDeals credit and debit rewards program, which officially rolled out on Aug. 16, is a free service for FNBO Direct customers who either have an Online BillPay checkless-checking debit card account or an Extra Earnings Visa credit card account.
To redeem an offer from such participating merchants as Home Depot Inc., Wal-mart Stores Inc., Target Corp., Starbucks Corp. and Macy’s Inc., customers log in to their FBNO Direct account and click on the electronic offer, which is then loaded into their Visa credit or debit card account, Teresa Sloboth marketing manager for FNBO Direct, tells PaymentsSource.
When consumers use their card at the specific merchant, FNBO Direct “receives the information on the back end, which shows us that the consumer did activate the offer,” Sloboth explains. Consumers receive the credit into their account at the end of each month, she adds.
Most cash-back offers cap at 15%, though some merchants also offer add-ons with purchases such as free coffee or free appetizers, Sloboth says.
The discounts and offers consumers receive each time they log in to their account are based on their transaction histories, a service powered through Cardlytics, an Atlanta-based transaction-marketing company, Sloboth says.
If consumers use their credit or debit card “on a daily basis, they will receive offers on a daily basis,” Sloboth says. And just like normal paper coupons, activated offers expire and become unredeemable if unused, she says.
Cardlytics works behind the scenes to help display relevant offers to participating consumers by helping merchants target customers by location, store name or frequency of purchase, Rod Witmond, Cardlytics senior vice president of product management, tells PaymentsSource.
Based on transaction history, merchants may offer a campaign to consumers who have “shopped in a specific ZIP code, spent a specific amount of money and have visited the store a specific number of times,” Witmond explains.
Cardlytics’ service is free to financial institutions; merchants only pay a fee when someone redeems an offer. Cardlytics declined to comment on the exact amount of the transaction fee.
Despite the delay in receiving rewards, MyDeals still seems like a “pretty compelling program all the way around,” Ron Shevlin, an analyst with Boston-based Aite Group, tells PaymentsSource. “Consumers are not used to receiving real-time rewards, so the fact that it isn’t immediate is not a major deterrent,” Shevlin adds.
Programs such as MyDeals are especially beneficial for consumers who want to spend money and enjoy receiving and using discounts for their purchases, Shevlin says. Plus, consumers “don’t have to deal with paper coupons or worry about points and have a promise of higher relevance because the offers are based on their purchase and transaction history,” he says.
And because consumers receive the funds at the end of each month instead of instantaneously, “they see more of a significant amount deposited,” Cardlytics Witmond says. In fact, “an average participant may receive $200 to $300 in program rewards cash each year,” he contends.
The program also may be beneficial for financial institutions, Shevlin notes. Because consumers have to redeem the offers online, “from the provider perspective, consumers are driven to the website, which leads to strong customer engagement,” he says.
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