Taking Card-Linked Offers To The Next Level

While there was a lot of excitement around card-linked offers when they were first introduced into the marketplace, things seem to have cooled — or at least quieted down. Souheil Badran, the newly appointed president and CEO of edo Interactive, agrees but believes that mobile can reignite the business model — provided that these platforms serve all of the stakeholders in the payments ecosystem. In a recent discussion with MPD CEO Karen Webster, Badran shared his thoughts on how this can all happen.

KW: The last time we chatted — not that long ago — you were the SVP & GM of payments for Digital River. You’re now leading a card-linked offers platform. What attracted you to edo and an entirely new part of the payments ecosystem?

SB: Edo’s a great business. It stands in the middle of the advertisers, the banks, and the consumers — and what I’m most excited about is the opportunity to bring all three of those together. I view edo as less of a card-linked offers platform and more of an advertising network sitting on top of payments transactions. There exists a huge potential to drive value to advertisers, as well as to the banks and the issuers by getting consumers to use their card more.

An enabler is needed to facilitate all of these connections, and that’s what appealed to me about edo, which brings it all together. A company that’s been in the business for eight years — which shows the longevity of the business and its value to its stakeholders.

KW: It is amazing that edo’s been around for eight years. Over that period, it’s raised about $73 million in capital — $20 million of that coincident with your recent arrival.

Despite that, it seems to me anyway that the card-linked space has kind of muddled along. It hasn’t necessarily gotten a lot of the traction that people initially thought it would. Do you think mobile is going to change that, in part, because it will make card-linked offers more visible to the consumer?

SB: Absolutely. People thought that card-linked offers would be the silver bullet to help issuers. To me, it’s actually a component of a marketing campaign.

Mobile has actually caused the market to shift a little from traditional card-linked offers, because people are exploring what else can be done with the platform.

For instance, a standard notion would have a company targeting a mobile user simply based on her location when she’s near a store; our resources allow us to better know that customer’s specific behavior based on historical data. We would know whether or not the specific offer in question would make sense.

KW: What’s the landscape right now in the card-linked offers space? For a while, there was a lot of frenzy around it, but it’s been quiet more recently. Is the market expanding? Is it contracting? What’s your sense of it?

SB: It’s the same as any market that has grown very quickly and has many, many players. The larger companies are acquiring others; some are trying to put out their own solutions and realizing it’s maybe a little harder than they initially thought. As one of only a couple of independent companies, we’re in a good position — it’s good to have competition in the market, as you know, otherwise it becomes stagnant.

We’re going to continue investing. The great news for us with regards to that $20 million round [raised recently] is that it came from existing investors; we didn’t have to go out and look for the money. That tells you how much they believe in the market.

As we look to expand our platform and expand globally, we will continue to complement our solution set with additional partnerships and technologies — especially in the area of mobile.

KW: American Express was a big early adopter of card-linked platforms. I have an Amex card and watch the space closely, but even I never felt the connection between going to a store and getting a benefit until much later. Isn’t that part of the challenge of getting card-linked offers to ignite?

SB: You’re absolutely right, and there are two things along those lines that edo is doing. One is what I’m calling the last mile. Today, there are many great offers in play from many financial institutions, but the challenge is to get the consumer to stay aware of and engage with them.

What we’ve done there is change the model a little bit into what we call “blended activation.” Traditionally, you have to click on an offer in an app to enable it; in that case, you may forget that you had planned to use it. With our model, once you actually see the offer, it is pretty much automatically enabled. And once you use that offer, you would be notified immediately via text message of your savings — so you’d get that immediate satisfaction that’s been missing.

KW: How easy is it for banks and merchants to take advantage of your platform? Is a lot of integration required?

SB: No, and that’s the beauty of it. We’re connected with Visa and with Discover and that means that the banks themselves have to do very little integration.

On the merchant side, there is no point of sale integration. We’re just running the campaigns on their behalf through the issuers. When the consumer comes in to redeem the offer, there’s no need for cutting coupons or any extra steps required on the part of the merchant. Everything is automated behind the scenes.

KW: It would seem to me that as things like Apple Pay, Android Pay and Samsung Pay roll out, there’s a built-in opportunity to activate or enable card-linked offers and bring another layer of engagement to mobile wallets. Is that how you see it?

SB: Very much so. Each of them has done a great job around loyalty cards — Apple especially — and now we can implement additional intelligence into that element to make it more targeted and more specific. We’re in a position to nicely complement those existing services.

KW: You must have a ton of data. Do you have the ability to deliver unique messages to individual consumers based on geography, spending and other details?

SB: Yes. We employ data scientists who craft analytics using edo data, bank data regarding customers, advertiser forecasting and competitive reports. Our analysts really share a passion for creating a data-driven business.

The beauty of the solution, which they are very proud of, is that we can show our advertisers what is the overall spend in their category — by zip code, by type of consumer, gender, age, any and all of those delineations — and what their spend is in any category. Then, we sit down with them and go over what changes might need to be made, putting a focus on whatever areas where there’s most competition for the business.

KW: As for the $20 million you guys most recently raised, what’s the specific plan for spending it?

SB: The biggest focus is going to be on enhancing the product by adding more data-point intelligence. The second part is working on the bookends, simplifying the reports for issuers and advertisers and, more importantly, integrating more quickly into the mobile networks.

Additionally, we’re working on publishing our offers through more affiliates.

KW: That’s interesting; sounds like you could sort of be the “affiliate network 2.0” for a mobile world.

SB: That’s a fantastic description; I’ll give you credit for coming up with it!

You’re absolutely right; we’ve got the platform, and we’re always working to see what we can do with it in terms of scalability. We are in position right now to bring content from other rewards networks into our ecosystem but also publish it through others, as well.

To return to the question about how we’re spending the money, we are using it to extend our platform. With regards to that — and this is tied very closely to our relationship with Visa Europe — we’re working on putting flags in countries beyond the United States. We’re launching in the U.K., Poland, Ireland and France … with an eye towards doing so in Asia Pacific.

KW: You’ve obviously found yourself at a really interesting company at a very interesting time — in a sense taking what you did at Digital River regarding payments and turning payments into a commerce play.

SB: It was great timing. If you look at the work that we did at Digital River, it really towed the line between commerce and payments.

Another one of the things that excited me about the opportunity at edo was that it’s about more than the issuers. Everyone focuses on the top 10 banks — which we have great relationships with — but the ecosystem offers so much more. And I feel that I am now in a position to leverage the ecosystem and the network to try and do more.

When I was running the [Digital River] gateway, we would offer our traditional reports. Customers were always saying, “Payments is a cost center. How do I turn payments from a cost center into a revenue-generating center so my CFO can approve my budget?” That’s really what we’re addressing here by working with the larger ecosystem, so we can provide more data and insight to clients and make payments a way for them to drive additional commerce — whether online or offline.

Souheil Badran will be discussing more about the role of commerce and payments, including the impact technology has had on the retail space, this August 4th & 5th in Chicago as a panelist at Retail Reinvention. Hosted by PYMNTS, the 2-day experience is designed to help merchants navigate the current and future wave of disruption across the retail payments and commerce landscape.

For more details on R2, click here.