American Express last week announced apartnership with Twitter that enables the company’s cardholders topurchase products by syncing their card on the American Expresswebsite and then tweeting specific hashtags. Amex cardholders havebeen able to load merchant offers to their accounts via hashtagsfor almost a year, but the most recent development enables them toactually buy products themselves using Twitter.
For credit card issuers, social media sites such as Twitter couldprove to be the ideal platform to deliver targeted merchant-fundedoffers. Many of the largest banks have deployed merchant-fundedoffer programs through one of a handful of vendors serving theindustry, but cardholder response rates tend to be higher for debitportfolios than credit. This is because debit card users, onaverage, check their balance several times per month, which createsmore opportunities to view offers.
Conversely, when a credit card account is a customer’s onlyrelationship with a bank, she is more likely to log in to theaccount only once per billing cycle. Merchant-funded offers haveenormous revenue potential for credit card issuers, but these banksneed to create opportunities to get merchants’ offers in front oftheir cardholders. This problem is more severe for Amex andDiscover, whose primary business is credit issuing, than Visa andMasterCard issuers. Amex’s integration with Twitter could helpresolve this issue. Many consumers engage with twitter on a dailyor even continuous basis, and the ability to make purchasesdirectly from Twitter removes some friction from offer redemptionprocess.