Mastercard: AI and Personalized Offers Drive the Future of Brands and Banks

Jill Moser, SVP Offers, Loyalty at Mastercard, told Karen Webster that we’re entering a new age of hyper-personalization, where context is critical.

Loyalty programs, of course, have been around for decades. As Webster noted, the granddaddy might be Neiman Marcus’s InCircle program, which made the firm the first luxury retailer to debut a loyalty program, way back in 1984. Airlines’ rewards programs are pretty much ubiquitous.

But by and large, those programs are not, and have not been, personalized — in fact the rewards and dollars in spending power built up are just ways to offset other purchases.

Nowadays, Moser said, when it comes to personalization and loyalty, “it’s not possible to have one without the other.”

Loyalty, she said, is not forged by a single transaction — it takes time, and is in fact an outcome of a longstanding continuum of engagement. Customers trust their banks, and they trust their favorite merchants, so the opportunity is there on the part of forward-thinking companies to deliver.

Yesterday’s Successes May Not Work

But missteps can be costly. It’s no longer acceptable for merchants to do what they did yesterday, to bank on what’s worked in the past. Cookies (the advertising and targeting kind) are not enough, and simply serving up an offer based on the most recent few purchases linked to cards won’t lead to success. 

That’s because consumers’ expectations are changing. They expect personalization — with Mastercard’s own studies showing that 70% of individuals expect a “more personalized experience tomorrow than they received yesterday.” 

PYMNTS Intelligence data shows that less than half of shoppers find the offers they get from merchants to be “very relevant” to their needs, while more than 40% of shoppers would switch to enterprises that offered better personalization. Millennials are among the cohorts most apt to make the jump to a new provider as they interact with those merchants instore and across digital channels.

More than half of Mastercard’s customers, Moser said, have indicated they’re willing to be shown offers — even from merchants they’ve never shopped before. They’re willing to shift their wallets and spending to new retailers who deliver on the promise of serving up relevant and timely offerings. 

The cookies are disappearing anyway, Moser said (Google is eliminating third-party cookie tracking beginning this year) and now merchants must reconsider where they want to spend their digital efforts and dollars in an effort to boost card-linked offers and craft personalized loyalty campaigns, and attract new customers too.

Mastercard, she said, has been leveraging artificial intelligence (AI), and has started to use generative AI, to help client firms curate offers for individuals based on a 360-degree view of transactional, zero and first-party data.  

By virtue of Mastercard’s scale, the company helps the merchant “engage in the right moment at the right time. … We have a relationship with more than 80 million merchants,” she said, “and we’re processing that number of transactions several times over, daily.” Through an understanding of how shoppers behave, individually (even if they’re influenced by social media), merchants can be more efficient with their marketing dollars. Consumers are pleased with the experience itself as they opt to redeem for cash back, travel points or a variety of other options beyond the confines of card-linked efforts.

AI, Moser said, can “unlock the predictive engagement that customers are looking for.”