Cardlytics, NetSpend Partner to Bring Targeted Rewards Offers to Underbanked Consumers via Prepaid Debit Cards

by Mercator Advisory Group 0

Sales Assistant With Credit Card Reader On Digital Tablet
Open-loop prepaid is a thin margin business, and with pressures mounting to lower cardholder fees, margins are likely to become even thinner. Introducing solutions that increase cardholder value while also delivering additional revenue can help program managers reduce product costs and/or increase profitability. This is the role of merchant funded discounts and the core of this announcement:

“Cardlytics : , the pioneer of transaction marketing : , and Austin, Tex.-based NetSpend Holdings, Inc. : , a leading provider of general-purpose reloadable prepaid debit cards and related financial services to the 60 million underbanked consumers in the US, have partnered to provide consumers with highly targeted rewards based on their prepaid debit transactions.”

To be effective, a merchant funded discount program must deliver real benefits to the merchant. If it does not, the discount offer will be too low to be interesting to the cardholder and insufficient to provide revenue back to the program manager. Cardlytics indicates that this dynamic is addressed in its platform as follows:

“Cardlytics’ transaction marketing platform is unique in that it provides retailers with the ability to present relevant offers to targeted consumers. Retailers can quickly and easily adjust the placement of offers to maximize their results – a level of efficiency not currently available with any other marketing vehicle.”

Netspend targets consumers who are looking for alternatives to traditional debt and credit cards, so it will be interesting to see how this target market appeals to merchants and the level of discount those merchants are prepared to offer.

Read the press release here:

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