Points International: Talks With MasterCard Banks ‘A Real Opportunity’

5:01 AM EST March 10th, 2014

When MasterCard last month announced a partnership with Points International that would help issuers increase the value of their loyalty initiatives, the goal was to take advantage of the popularity of travel and related experiences.

But for Points International, the deal will provide access to card issuers it never had before, and increased opportunities.

Points will be partnering with MasterCard’s loyalty division to add value to the dozens of bank loyalty programs globally that leverage the MasterCard loyalty platform. Issuing banks on MasterCard’s loyalty platform will gain the opportunity to deliver greater flexibility to consumers through exchange and trade of airline miles, hotel points and other loyalty currencies.

“We’re very excited about the opportunity to deliver these unique capabilities, which are currently unavailable to consumers that are members of many current credit card based rewards programs,” Kimberly Esterkin, investor relations officer at Points, told analysts during a March 6 conference call. “The financial services industry has been a high priority for Points for some time, so we’re especially excited that MasterCard has chosen to partner with Points.”

Limited early benefits

Points expects limited near-term monetization from the partnership, but it does expect it to lead to increased opportunities within the financial services sector, she said.

To Robert MacLean, Points CEO, the deal represents “a very, very significant long-term opportunity for us,” he said on the call. “We see it really as an opportunity now to go in and start interacting with those individual bank issuers, and that will take a little bit of time.”

As an example of an opportunity and global reach the deal brings, McLean used a bank in China that could be a potential bank that could, through points.com, enable customers to take the Chinese bank’s currency and convert it across points.com into any of Points’ partners.

Added utility

“It’s really designed to give consumers of all of these various programs more utility and more value, and they will do that by being able to redeem their currency across points.com and interact with our platform,” he said. “So for us, we like that opportunity again to bunch of net new loyalty currencies.”

Points also likes like that as those exchanges or trades happen, it also funnels valuable revenue into its existing. “Those are the kinds of things that I would point as being just a very simple example of how we will benefit from the MasterCard relationship,” McLean said.

Approaching banks hasn’t yet started, but it should during the first half of this year, he said. “We haven’t started that process until we have the platforms in place and then get it on the road,” McLean said, noting, however, that he has yet to receive any direct feedback from the programs.

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