As momentum continues to build around card linked offers and it starts to become an accepted form of digital savings in the consumer’s everyday shopping experience, a lot of players are entering the space and looking for a piece of the pie. Since my background is in the financial space and I co-founded a company based on bringing card linked offer technology to fruition – I thought I might tackle one of the questions floating around in the industry: Which financial, bank and card stakeholders will be the early participants and leverage the trend to their advantage?

Issuing Banks

Let’s start by acknowledging that issuing banks own the core relationship with the cardholder, and as such, are uniquely positioned to provide both the functional enablement of the capability as well as direct marketing outreach to large and established portfolios of consumers. Despite the recent negativity around banks and data, they still hold a position of trust with their constituencies and consequently are able to drive higher opt-in and participation rates than other stakeholders positioned along the financial rails. Debit issuers in particular are motivated to seek out new merchant-funded rewards programs to replace the bank-subsidized programs of the pre-Durbin era.

• The Challenge: Barriers to banks seizing the opportunity may include limited resources to test and rollout, slow implementation speed and project prioritization.

The Payment Card Networks

The payment card networks also seem like the perfect entities to drive card linked functionality. More than any single bank, a network may drive quick, large-scale consumer adoption through the “long tail” of enablement they can provide to their issuing bank members. Seizing upon the opportunity to act as the agnostic and reliable source of card linked offers, the networks can garner an important seat at the table and add additional value to the services they provide to their issuers. They also have considerable brand presence and marketing resources that could be leveraged to further drive consumer awareness and adoption.

• The Challenge: Reasons why the networks may miss their chance include the large banks moving independently in advance of a network partnership option, concerns about overstepping their ground and encroaching upon the bank-cardholder relationship, and fears about data ownership and privacy rights.

Processors/Acquirers

Last but certainly not least, the processors/acquirers also have the tools and experience to play a role in this emerging market. Unlike banks and networks that have the potential to engage with consumers directly, the processors are more behind-the-scenes players. This positioning along the payment rails may also be a benefit because processors may also be able to participate in the
sourcing of incentive offers and enhanced settlement capabilities through their direct-to-merchant relationships. Additionally, processors have strong experience in providing reliable data access and some have existing platforms/APIs that are available now for partner card linked offer companies to utilize.

• The Challenge: Roadblocks to this group include limited merchant coverage from processor to processor, higher data costs, and being crowded out of the market by banks and networks.

While each of the three stakeholders referenced above could play a role in the emerging card linked offer industry, it will be interesting to look back a few years from now and see which group (or groups) recognized the opportunity that exists today and seized upon it for their long-term advantage.