Are card-linked offers the solu3on to a decreasing interchange?

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Christiana Cobb
8 years ago
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1 Are card-linked offers the solu3on to a decreasing interchange? Pierre BOCES Head of Product MarkeBng and ConsulBng Welcome Real Time

3 Card issuers with exis3ng loyalty programmes face new challenges from regulators Decreasing interchange Decreasing interchange revenues Pressure on loyalty programmes ROI

4 One solu3on is to tap into merchant funding Pressure on loyalty programmes ROI Looking for merchant funded rewards......linked to the usage of the bank s cards Card-linked offers

5 Card-linked offers meet both issuers needs... + Value payment data Find new funding for rewards Increase credit card usage

6 ... and retailers needs + Improve targejng AGract new customers Increase basket size / repeat visits

7 Most card-linked offers are monetary offers in the form of cash back Easy to: nego3ate remember compute track VS

8 Typical customer journey with cash back CLO Offer selecjon Payment CommunicaJon Offer conversion 90 Euros IntenJon to use an offer In-store payment NoJficaJon of discount Monthly statement

conversion 90 Euros 1 2 3 4 IntenJon to use an

9 CLO key actors AdverJsers (merchants) Sourcer Aggregator Publisher (card issuer/scheme) Customers/members Merchant recruitment Offer creajon Publishing Follow-up Offer TargeJng Behavioural filtering Clipping Usage

Customers/members Merchant recruitment Offer creajon

10 From merchant funding to customer offer AdverBsers (merchants) Sourcer Aggregator Publisher (card issuer / scheme) Customers / members 10% funding 2% commission 8% 2% commission 6% 1% commission 5% cash back Example of split between inijal funding, commissions and final generosity

funding 2% commission 8% 2% commission 6% 1% commission 5% cash back

11 What makes or breaks a CLO programme (1/2): Advanced Analy3cs to create relevant offers DescripBve analybcs: what has happened? PredicBve analybcs: what could happen? 0% probability 3 visits at Home Depot 50% probability

12 What makes or breaks a CLO programme (2/2): Network of funding merchants to grow program Merchant recruitment Monitoring of KPIs Growing the network deadweight OF CUSTOMERS 150 retailers =

13 Once you get it right, CLO bring benefits: Customer Bank Merchant Great savings Relevant offers Ease of use BeYer ROI on rewards Strengthened card usage Increased customer sabsfacbon AddiBonal traffic More relevant customers Incremental sales

on rewards Strengthened card usage Increased customer

14 Are card-linked offers the solu3on to a decreasing interchange? One of the available solubons among =

15 Examples of card-linked offers programs Credit Mutuel-CIC American Express MasterCard

16 Acquirers enable offline CLOs with merchant-centric loyalty Credit Mutuel-CIC POS terminal with extended CLO capabilibes Merchant Portal to create offers

17 Offline CLOs bring more opportuni3es than online CLOs Offline VS Online commerce Larger X 10 sales volume in store than online Card payments convenience FricBonless customer experience in store compared to online

18 Brick & mortar acquirers can enable offline CLOs for non-banks with earning of miles and points Acquirers capabilijes CLO hub for Airlines, Media, Hotels Access to in-store transacbons data ExisBng contractual relabonship with merchants Good market share

for Airlines, Media, Hotels Access to in-store transacbons data

19 The winning combina3on for merchants... and acquirers Brick & mortar Acquirer In-store payment data Cardlinked offers Nonbank customer base Conquest

20 Thank you

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