A new loyalty scheme uses consumer-behavior data to shape individualized rewards, and ISOs can promote the system to merchants.

Total System Systems Inc., or TSYS, is reselling the system and is calling upon ISOs and agents to make it available to their merchants as a value-added service.

The Columbus, Ga.-based processor has been working with the company that developed the system, Silicon-Valley-based Truaxis Inc., for about eight months, says Paul Bridgewater, TSYS group executive of global product.

In the meantime, MasterCard Inc. acquired Truaxis last month with no apparent slowdown in the TSYS introduction of the service.

Truaxis salespeople have been pitching the system to large national retailers but not to small merchants, leaving an opportunity for ISOs and agents to offer it to their current clients and to potential clients, Bridgewater says.

“I don’t believe Truaxis has gone down the ISO path,” he notes.

ISOs can put a few pages for the service on the portals they present to merchants to give retailers control of the service, Bridgewater suggests.

For their efforts, ISOs receive a cut of the proceeds, while providing a service that makes their relationships with merchants more “sticky,” he says.

Observers agree that merchants that use more of an ISO’s services find it more difficult to switch transaction providers.

Merchants using the system work through a step-by-step process that Bridgewater calls “straightforward” and “intuitive” to choose offers they want to make to shoppers. The merchants then set the criteria for qualifying for those offers.

Based on data already compiled, the system tells merchants how many of their customers appear likely to qualify for the offer and how many of those who qualify seem ready to take advantage of it, he says.

If those numbers indicate a probable payout that seems too big, the merchant can limit the number of consumers who receive it.

Moreover, merchants pay only when consumers accept rewards, Bridgewater says.

“It’s a ‘pay-for-performance” model,” he notes. “It doesn’t cost anything until somebody starts buying.”

The model works because TSYS feeds data from online and offline credit and debit card transactions into the Truaxis platform, thus showing consumers’ purchasing habits.

When those habits match a merchants’ offer, the Truaxis platform notifies the consumer of the loyalty reward by posting a notice on electronic or paper billing statements, Bridgewater says.

In most cases, rewards appear automatically, and consumers have the chance to opt-out if they’re not interested.

Consumers also have an opportunity to “like” the rewards which, along with transaction data, “teaches” the system which rewards to offer, Bridgewater says.

The offering fis part of the TSYS “connected mobility strategy,” which has already introduced Near Field Communication capabilities and should provide additional services soon, he notes.


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