New Reports on Merchant-Funded Rewards Are Out
2012/09/03
A few months ago I blogged about merchant rewards and cards and invited relevant companies to participate in my forthcoming research. I am pleased to announce today that the results of that research were published last week. The first report, "Can Card Issuers Turn Loyalty Program Costs Into Revenues?" builds the case for merchant-funded rewards. It explains the evolution of the 'merchant-funded rewards' (MFR) term, reviews the current state of the market and considers its future development. As I acknowledged in the note accompanying the report, it takes time and effort to build a substantial network of merchants, FIs, and consumers, which is why the MFR programs have yet to truly move the needle in terms of overall results. However, in our view, the benefits of MFR programs are obvious, and the market is brimming with promise, is clearly on an upward trajectory in terms of FI and merchant adoption, and with some impressive individual success stories already. The second report "Selecting a Merchant-Funded Rewards Platform" takes an in-depth look at the leading MFR platforms: Affinity Solutions, Cardlytics, Cartera Commerce, edo Interactive, FreeMonee Network, Linkable Networks and Truaxis. In addition to containing detailed profiles of each company, the report analyses how the platforms compete and differentiate from each other. It's only on the surface that they all look very similar; in fact, important differences exist. Understanding these differences helps financial institutions when deciding on potential partners. Merchant-funded rewards is clearly a hot topic at the moment. In addition to the published reports, I will also be moderating a couple of related panels in the near future - one at the American Banker webinar and another at the ATM, Debit and Prepaid Forum. If you haven't done so yet, please consider registering for both of these events. Also, if you are a Celent client and would like to discuss these reports in more detail, don't hesitate to reach out to me directly or via your account manager. I will continue to keep an eye on this exciting space and would be very interested in your efforts and perspectives.