Card-linked offers have struggled to get traction for lots of reasons. But Keith Smith, president of Wonder Technologies and card-linked offer veteran, says he knows why. In this week’s installment of The Matchmaker Is In series, hosts Karen Webster and economist and “Matchmakers” author David Evans talk to Smith about his belief that gifting is the ignition that merchants and consumers need to give them a new lease on life.
It’s been a rough road for card-linked offers.
In theory, the fostering of a connection between merchants and customers by integrating offers directly into the network-branded account they’re using at the merchant sounds ideal.
But as Karen Webster pointed out last year, these offers and promotions ecosystems have been around for years and raised a ton of capital but have failed to turn the heads of a critical mass of merchants or consumers to get traction.
In the latest episode of The Matchmaker Is In series, hosts Karen Webster and David Evans, economist and author of “Matchmakers: The New Economics of Multisided Platforms,” explore the pitfalls of card-linked offers and how one matchmaker is using the power of gifting to overcome them.
Evangelizing For Gifting
Though card-link offers have yet to reach the full potential expected by the industry, Keith Smith, President of Wonder Technologies, believes that all hope isn’t lost.
“One of the challenges of card-linked in its infancy was expecting consumers to go to their financial institution looking for value,” Smith explained. “It’s worked, but I don’t think it’s worked to the scale that everyone was hoping or expecting it would.”
Smith, a serial entrepreneur with two decades of payments experience, observed another big friction in payments: gifting — and digital gifting in particular.
Merchants typically have no idea who sent the gift and no idea who redeemed it — so, they have no ability to influence engagement.
Those two frictions, Smith said, are at the heart of Wonder’s technology platform: combining card-linked, network-branded cards with gifting to overcome the five Rs of gifting: receiving, remembering, redeeming, repeat visits and reengagement.
Through Wonder’s technology platform, when a gift is received, a consumer can accept the gift and link its value to one card or several network-branded cards of their choice that they already have. This allows the gift to be attached to a payment vehicle that is most preferred by that consumer, instead of having to carry another card or remember where the digital gift card was stored.
The goal is to empower merchants to move their customers through a growth process of increased loyalty — essentially helping to develop prospective customers into brand advocates and eventually getting that consumer to the point where they are sending the gifts themselves.
What’s A Gift?
The chicken and the egg of Wonder is not atypical of what every player in payments faces. Who comes first? The consumer or the merchant?
In Wonder’s case, the answer is pretty clear: It’s the merchant. It’s why Wonder’s key priority now is to deliver a set of tools that make it easier for those merchants to create digital gifts that allow them to get their own consumers on board and build out brand loyalty.
“The fact that we can actually prove consumer intent based on the acceptance of the gift and the linking is very valuable,” Smith said, adding that this presents the opportunity for merchants to not just gift but also cross-sell in other parts of their business. When retailers look at their consumer base, Smith said there are many things that come to mind from a marketing perspective, such as how to get more customer spend, how to make customers more loyal, the development of brand advocates and reaching the social networks of those consumers.
It’s his belief that gifting can address these concerns — but not the “it’s my Dad’s birthday, and I need to give him a present”-type gift.
Wonder is out to expand what it really means to gift, which is how Smith said he and Wonder plan to take gifting to the next level, while also “helping card-linked technology to become what we all set it out to be five years ago.”
Gifting can be used as more than just something one person gives to another but also how merchants can reward loyal customers. “Thanks for booking at this hotel. Here’s $5 towards drinks at the bar — all applied to the card used to make the booking. Thanks for spending $150 at the Accessories Palace. Here’s $10 to use the next time you visit.” These are all the sorts of “gifts” that the Wonder platform can enable to “give” loyal customers a gift — a gift that it also hopes will keep on giving, as those consumers tells others, who tell others, who tell others.
Wonder’s platform enables merchants to do this without requiring changes at the POS, putting software on their payment terminals or even training employees, Smith explained.
“It’s helping people understand that there’s more to gifting than going to the grocery store and getting a gift card or going to a website and sending a digital gift,” he added.
Delivering On Value
When asked for his reaction to the moves of the many other matchmakers in payments, Smith emphasized how all of them reflect the blurring and blending of the lines between digital and physical, all aimed at delivering a more seamless consumer experience.
“There’s so many choices for a consumer today that merchants are constantly trying to figure out how to juggle all the different offerings that are out there and enable them. But I think that what we’ve seen recently is that cooperation is probably bigger than ever,” Smith explained.
And so is the potential value to the consumer, which he said extends well beyond just the payment card or account they can register to a mobile wallet.
“I think that these companies now realize that it’s important to work together and innovate together,” he stated.