Loyalty marketing is considered a substantial lure for mobile payments, but the introduction of new channels also complicates the strategy, according to Kevin Wray, the chief commercial officer at Switchfly.

Switchfly, a travel commerce company, is trying to adapt loyalty and data-driven personalized marketing available over multiple channels for narrow segments within the broader travel industry.

"Different people have different needs and respond differently, so the CRM has to match that, the experience needs to be personalized," Wray said. "That means a lot of things. For an 'elite status' member it may be access to a four or five star accommodation. Or for a other members it may be the lowest price option."

These differences have always existed in the travel and hospitality businesses, but Wray said travel becomes more complicated in the new shopping and purchasing environment, where consumers shop and book on a mobile app and pay in person at a service desk, or book a flight on mobile and a hotel and rent a car in other channels, or mix their channels for all three steps. At each step, any perk, offer, coupon or reward needs to be accessible and redeemable in real time, Wray said.

Switchfly's approach is a suite of configurable white-label products aimed at airlines, hotels, travel agencies and financial institutions. Through a cloud server, the company matches real time decision engines with loyalty, member profile and CRM systems.

For airlines, this enables fares and seating options to benefit from a connection to mileage or points-based loyalty systems. For hotels, services can include pricing and marketing programs. Its service for financial institutions combines redemption, segmentation and targeted messaging.  A program for travel agencies combines hotel, flight and car booking with rewards programs, and access to leisure activities.

There is an opportunity to support an omnichannel booking and rewards redemption experience that's part of a broader digital payment or commerce program, Wray said, adding financial institutions or travel agencies can use both the rewards and user experience to lure consumers.

"Instead of saying 'we have a travel platform,' it's easier to say 'here's what we do with hotels or airfare,'" Wray said. "Or this can be useful for a card program that has a travel points option."

Travel and airline payments pose special challenges for payments companies.

Apple Pay, for example, is gradually coming to air travel as airlines determine ways to accept Apple's mobile wallet while phones are in airplane mode. And companies like CellPoint Mobile are approaching airlines with mobile loyalty programs.

Paying for and executing travel via mobile has proven easier on the ground, since the airport experience is increasingly reliant on mobile apps for check in and other airline services. That has allowed other mobile-based services such as payments to gain a foothold.

In the hotel industry, Hilton has long used mobile apps to tie check-in and payments to other services. American Express has partnered with Starwood Hotels and Apple has collaborated with a casino in Las Vegas.  

Tying these services to loyalty across channels can be done, though there are some challenges, according to Thad Peterson, a senior analyst at Aite Group.

Keeping track of loyalty points in different channels can be accomplished through aggregation and management on a cloud-based server, Peterson said. Messaging about the customer's behavior isn't difficult because text or email can be sent just about any time to just about any device, he said.

"And with advances in CRM and location-based marketing, the experience can be pretty rich and personal," he said.

What is hard is providing coupons and redemption in real time.

"The challenges are clear, there are different programs in different stores with different point of sale platforms and terminal hardware," Peterson said, adding that QR code redemption can make it possible to deliver a coupon that works in both a digital and physical environment. "Pay with points is more challenging,and I would expect that it would most likely be seen in major retailers with proprietary programs, rather than with car issuers or networks."

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