A Denver-based start-up that began by offering Facebook credits as rewards is adding a proprietary prepaid card to create another redemption option and to help expand the program's marketing potential.

Plink LLC, which launched in January, is working with another start-up, Seattle-based Tango Card Inc., to offer participants digitally delivered gift cards redeemable at such locations as Amazon.com, The Gap, Home Depot, Apple's iTunes, Nike and Target stores, the companies announced June 18.

The card will be made available in a couple of weeks, Peter Vogel, Plink's co-founder and president, tells PaymentsSource.

Adding the Tango card as a redemption option will increase Plink's audience beyond Facebook users, Vogel says. This makes Yahoo, Google and MSN additional options as marketing vehicles.

"It just opens the whole Internet to us," he says. "We can expand our rewards catalog so we can market and reward customers Internetwide."

Tango Card operates its own proprietary prepaid card program and processes its own transactions, says David Leeds, Tango Card's CEO. It has relationships with 16 retail brands plus an additional nine nonprofits that give cardholders the option to donate from their card accounts, he says.

"We don't charge any fees, and there are no expiration dates," Leeds says. "We own all the infrastructure behind it and don't run on traditional payment rails."

Tango Card, which launched in November 2010, earns its revenue from the stores where the cards are redeemed. It gets a prenegotiated commission on the sale.

"We try to pick brands that are super-friendly but also those that don't have expiration dates and are consumer-brand conscious," he says. "We try to get like-minded brands but also those consumers want."

Plink and other customers pay Tango Card only the amount deposited into the card accounts, he says.

The card program is entirely digital, though some companies have requested plastic cards for distribution during the holidays, Leeds says.

Plink rewards users for eating or shopping at participating restaurants or stores. Members earn rewards at any of the 35,000 locations operated by such companies as Taco Bell, Arby's, Quiznos, Red Robin, Burger King and Outback Steakhouse, Vogel says. Plink has relationships with nine national brands in total.

When registering, participants provide their e-mail address and link their Plink account to a debit or credit card, which is used to monitor spending for reward-redemption purposes.

"What we do is drive our customers to go eat and shop offline," he says, noting most of Plink's customers are players of online Facebook games. "We drive consumers from online to offline."

Plink earns its revenue by receiving a commission that ranges from 5% to 15% of the sale from participating businesses, and the income is entirely performance-based.

"It's essentially risk-free for" merchants, Vogel says. "If we don't drive sales to the restaurant, they don't pay us."

Plink, in turn, rewards its customers with Facebook credits. Participants who spend $5 at Burger King, for example, earn seven Facebook credits, Vogel says.

For the gift card option, 10 Facebook credits will equal $1, and Plink may make the cards available in $10 increments, Vogel says.

The number of participating locations should reach 75,000 by yearend, Vogel says. At that time, the number of consumer participants should exceed 100,000. Plink has "tens of thousands" of consumers today, he says.

Tango Card's Leeds declined to discuss specifics of his company's growth projections, saying only that its transaction volume should be 30 times bigger this year than in 2011.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry