New research from Mercator Advisory Group sizes the market for a new issuer rewards model
Boston, MA December 4, 2012 The recession has turned many consumers into value-conscious shoppers, and merchants are seeking ways to exploit this mentality to attract new and retain existing customers. At the same time, issuers have an urgent need to create new revenue streams to compensate for declining balances on credit portfolios and reduced interchange revenue on debit portfolios. The combination of these forces is creating an enormous opportunity for merchant-funded network vendors, which have developed technology that can bring issuers, merchants, and consumers together in a way that benefits all stakeholders.
Mercator Advisory Group's newest report, Merchant-Funded Networks: Bolstering Credit Card Rewards, describes how U.S. credit issuers are implementing merchant-funded programs alongside proprietary reward schemes, and presents several ways for issuers to think about the value these programs provide.
Michael Misasi, analyst at Mercator Advisory Group and author of the report comments, "The amount of venture capital that merchant-funded program vendors are raising suggests that investors are confident in the future of card-linked offers. Mercator's analysis confirms that there are several reasons to be hopeful but also identifies areas where significant progress is required for the market to realize its multibillion-dollar potential."
Companies mentioned in this report include: Affinion Group, Affinity Solutions, Aimia, Alliance Data, American Express, Apollo Management, Bain Capital Ventures, Baird Venture Partners, Bank of America, Bankons, Bessemer Ventures, Billeo, Canaan Partners, Capital One, Cardlytics, Cartera Commerce, Cbsi Loyalty Solutions, Chestnut Hill Ventures, Citi Ventures, Clairmail, Clayton Associates, Common Angels, Comvest Group, DACE Ventures, Discover, Edo Interactive, FCA Venture Partners, First Avenue Partners, First Data, FIS, Fiserv, Flybridge Capital Partners, FreeMonee, GCG Angels, General Atlantic Partners, GLIDE Innovation Fund, Groupon, Harvest Partners, Intuit, IRC Holdings, Jack Henry, Jumpstart Inc., Jwaala, Kepha Partners, Kinetic Ventures, LBO Enterprises, Linkable Networks, MasterCard, NetSpend, Opus Capital Ventures, ORCC, PayPal, Pinnacle Partners, Polaris Ventures, Red Point Ventures, Regions Bank, Rewards Now, Segmint, Sutter Hill Ventures, Total Technology Ventures, Trinity Ventures, Truaxis, TSYS, UFG Asset Management, University of Akron Research Foundation, VantagePoint Capital, Vantiv, and Visa.