Foursquare’s user base hit 10 million within 2 years growing at a staggering 1000% pace. We expect that at its current pace, Foursquare could well reach over 100 million users by 2017.
In a scenario where 1% of Foursquare members are drawn to American Express cards, this could lead to an additional 50,000 American Express-issued cards in the U.S. in the second half of 2011 – growing to almost 1 million additional cards by 2017. Since more cards-in-use translates into higher transaction volumes, this would mean higher transaction fee revenues for American Express.
Foursquare, of course, gains advantages as well:
Partnering with an established global financial services firm such as American Express boosts Foursquare’s credibility and reach. It also enables Foursquare to provide its users tangible “real-world” rewards in the form of discounts – rather than virtual badges it is best known for. By offering more specials with retailers, Foursquare will likely gain more users looking for deals and increase the engagement of existing users.
American Express has been a pioneer in its use of social media across its programs, a strategy which will also support its efforts to build a base of new, younger cardmembers.