Loyalty & Rewards

UTU Takes Loyalty Cross-Border

Loyalty and rewards — even on a local level and even under ideal conditions — is not an easy nut to crack. It’s a target that retailers all strive for, and when it works well and has the desired sticky effects because it adds value to the consumer and the merchant, it’s a beautiful thing.

It is also a surprisingly difficult thing to make work. Like most things in payments, a process that looks simple, like earning and then burning points at merchants, belies the complexities of actually making it work.  Even as recently as a decade ago (a literal eternity in payments), trying to do that, in real time and at the physical point of sale, was only slightly less complicated than setting out to solve Fermat’s Last Theorem.

But fast forward ten years, and as loyalty innovator, UTU CEO and co-founder, Asad Jumabhoy recently told PYMNTS, the time is ripe to leverage the advances in technology on both the merchant and consumer side and take loyalty to a whole new level.

Like cross border.

“Consumers have more computing power in their hands and pockets with their phones then they had on a desktop ten years ago,” Jumabhoy noted, which means things are possible today that would have simply been out of the question before — if commerce players are willing to “use some of that power.”

Jumabhoy knows about what he speaks. An entrepreneur with a long history of innovating in the tax-free refund business, Jumabhoy recognized the many consumer and merchant frictions associated with the cross border shopping experience. UTU (pronounced You-Too) is an idea that he and his co-founder, son Ameer, and Jeremy Tan have been kicking around since 2006. Simply speaking, UTU is a cross border coalition loyalty platform that makes is easy for consumers traveling around the world to receive offers from merchants in the country to which they are traveling, earn points by shopping at those merchants and then redeem those points at any other merchant in the network.

Why tourists? An untapped market, Jumabhoy said. Rewards programs tend to target repeat customers but miss out on tourists and business travellers who are unlikely to become “regulars” in the traditional sense. But Jumabhoy noted, those non-recurring customers present an awful lot of value — because people travelling on holiday or business tend to spend and can be highly influenced by an offer of points and points redemption to shop at those merchants.

“What we want to allow merchants to do is talk to their potential customers coming in from foreign lands and given them a platform to reach them with rewards before they’ve even left for your country,” Jumabhoy explained.

So how do they do it - and how does it work for the travellers and merchants they matchmake for?


Connecting The Dots

In the digital payments landscape, creating touch points for rewards is actually pretty straightforward.  The challenge Jumabhoy is solving for is getting all those little dots to connect across the globe through an international network of issuers, acquirers, card networks, and local taxing authorities — which is very, very hard.   Jumabhoy noted that the developing the code for their platform was the easy part – it took about eight months. Getting all the cross-border pieces moving in preparation for their launch today, on the other hand, took years and many time consuming learning experiences.

But what they launched today is a rewards network that serves both consumers and customers all over the world — and that asks very little from either party.

Think card-linked offers that are cross border.

“We work very closely with acquirers, issuers and ‘conversion partners’ [merchants] who want to touch potential consumers.  We aggregate offers that merchants want to contribute and give consumers an opportunity to tag them and link them to their cards,” Jumabhoy said. “The savings are then reflected on the consumer’s bank statement, which means that the merchant has to do nothing to take part in the scheme.”

Jumabhoy said that merchants are given the opportunity to build their rewards offering and to change that on the fly and then publish those offers to the platform. UTU provides data analytics tools to watch the progress of those promotions and tweak and modify them as they go.


The Consumer Experience

As with most such innovations, it starts with a trip to the App or Play store, a download, an account creation and listing as many as five cards.

Then it is time to start planning a trip — and fielding offers.

“When consumers shop overseas or at home, the issuer and the network want the same thing — for that consumer to shop with their card, top of wallet is their goal. Issues can offer consumers points for using their card on those trips, or using it in a certain way or at certain merchant locations. Merchants can offer points for visiting them and individual merchants can make offers. There are any number of ways that consumers can earn and redeem points,” Jumabhoy said.

From the consumer’s standpoint, very little other interaction has to take place — at some point the consumer swipes or dips their card at a participating retailer and gets a ping on their phone informing them of their reward.

“They then get a choice – to ‘bank’ those points or to cash out at the merchant with that purchase,” Jumabhoy explained.

Cashing out, in this case, means a statement credit from UTU for the amount of the reward.  The system is designed to let customers expend points if they leave their travelled to destination and return home with points to burn. They can be used at local merchants or turned into card bonus points — or there is always the cash out.

The design, Jumabhoy notes, is built around simplicity — and the fact that customers don’t have to do much that doesn’t fall much outside their normal trip planning routine as it exists.  It fits into what consumers are doing — and provides them with a few different ways to apply it.


What’s Next

UTU will be getting it first official kick-off in Thailand in just 11 days — after what its co-founder affirmed was not always an easy walk, given the complexity of working with international payments players just to build an accessible rewards system.

“It has been  the university of hard knocks at times. I think I’ve lost 6 kilos (14 pounds) in the last year,” Jumabhoy said jokingly to Webster, before noting “I’m not really complaining though, I love it, my tailor thanks me.”

The important thing, they note, is building the rewards network so it really can function internationally.

UTU will be available in Thailand on November 14 — with 10,000 merchants and 300,000 waiting in the wings. From there it will be a quick roll-out in a handful of  Asian countries in 2016/2017.

And that expansion pattern was intentionally chosen, he noted.

“When you look at the data - it is clear that there is a certain set of seven to eight Asian countries that provide most of each other’s cross-border sales — and do so on a consistent basis. You take a step farther back those same seven to eight countries you find a lot of movement between there and Europe as those seven or eight countries' consumers are providing the massive amount of tax-free commerce in Europe.

And that observable flow of currency back and forth is why, for all intents and purposes, the European and core Asian roll-outs will be happening nearly concurrently in Asia and Europe in early 2017.

And from there, he said, the big goal is the United States, though the U.S. presents a host of challenges unto itself.

“If you want to sell this to a US market, the first thing you have to understand is that  it’s not a country — it is a continent.  It is not like Singapore or even like England. That is a market we plan to approach with a strong and robust offering or cross border experiences for merchants ready to offer.”

Whether UTU can make a global rewards platform work remains to be seen — they’re one country down with the rest of the world to go in a rewards space that has wrecked many smart ideas on its rocky shores.

But UTU certainly didn’t come at if fast or casually — and they’ve made it easy for merchants to participate and attractive for issuers to jump on board. As with everything, though, consumers have to take that first important step – download that app, and then find enough compelling offers to get hooked. Hooking tourists with a hankering to spend money and an open mind to the places that might make it worth their while is an interesting take on the card-linked offers scheme – and with a cross border twist.




Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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