As many as 8 million consumers using online banking from Online Resources Corp. could soon have access to merchant-funded rewards from Truaxis Inc.
The rewards program, called StatementRewards, provides access to offers from local and national merchants based on consumers' purchasing interests or, in some cases, their location, says Carlo Cardilli, senior vice president for business development at Truaxis.
"Financial institutions have a treasure trove of customer data, and we help them get that data to become useful," Cardilli says.
Truaxis, a Redwood, Calif.-based provider of data-driven offers for financial institution customers, will provide its software for Online Resources' digital banking sites throughout the rest of the year, the companies announced Aug. 15.
Truaxis performs data cleansing and aggregation to build a profile of what a customer is likely to purchase or where that customer might travel, Cardilli says.
Location-based offers can be targeted in such a way that a consumer who just pumped gas could then receive an offer to buy something at the gas station's adjoining convenience store, Cardilli says.
The location data is obtained from the authorization of the gas payment, and the offer is sent to the customer's phone at the same time the transaction is completed, Cardilli says.
Smaller banks and credit unions view the rewards service as adding extra value to the customer's account, providing a technology that normally only larger banks can provide, he says.
The Online Resources clients can invite local merchants to participate in the rewards program in addition to the existing national merchants that fund offers, Cardilli says.
Banks generally tie in the rewards with the payment card they issue and also can create offers on bank services.
"Banks have a customer database that tells them how many products, like a mortgage or lease, a customer bought," Cardilli says. "But we can help them determine what that customer bought from another bank, and then craft an offer tied into that service, only to those users."
Truaxis analyzes "the deep data" of the customer to determine if payments are being made to other lenders or banks for various products. "Extracting deep data is very powerful," Cardilli says.
Similarly, banks can use offers to guide consumers to cheaper transaction types, such as PIN debit, he says.
On the consumer side, Truaxis, which used to be Billshrink, continues to offer bill analysis, helping consumers find the best deals and prices for fuel, cable TV services mobile phones and other services.
Truaxis serves more than 50 million users through a network of financial institutions using the company's software-as-a-service model, Cardilli says.
"We use cloud technology, but we store data in our own secure data centers and operate our own infrastructure," he adds.
Truaxis "brings a number of pieces of the pie together" for banks seeking a way to help merchants and customers with targeted deals, says Ron Shevlin, senior analyst with Boston-based Aite Group.
"Truaxis really has done a great job in this area of merchant-funded deals because they analyze the data, bring the merchants in and provide the technology to deliver the offers in the right places," Shevlin says.
Merchant-funded rewards are generally more meaningful to consumers because they are targeted to their specific spending habits and needs, as opposed to the Daily Deals model, Shevlin says.
"Our research has shown that consumers don't think the Daily Deals are relevant to them," Shevlin adds. "But the targeted merchant rewards are specific to what they may want or need."
Banks are not typically aggressive in seeking merchants to participate in such a program, but they are "in a good position to help the whole customer experience" through services such as those offered through Truaxis, Shevlin says.
While not exactly the same program as Truaxis offers, Bank of America announced a comparable offering this week through Cardlytics with its BankAmeriDeals cash-back deals for customers using the bank's online or mobile banking apps.