Unlocking ‘Self-Driving Money’ With Smarter Card Reward Management

Most credit cards — more than 80% — offer rewards to their users.

But making the most of those rewards can be a challenge, particularly for shoppers already caught up in the throes of the purchase occasion.

And making matters more complicated is the fact that, as Tikue Anazodo, co-founder and CEO of Kudos, told PYMNTS CEO Karen Webster, existing digital wallets focus more on driving merchant integrations than on solving real consumer problems — which is why one of the biggest challenges in digital wallet adoption is ensuring that the wallet works seamlessly across all shopping platforms.

“I don’t go to stores with my physical wallet and my physical credit card and wonder whether or not it’s going to work,” Anazado said, adding that because many digital wallet providers are still trying to solve for the merchant integration problem, “they put everything in terms of consumer value on the backseat.”

But by focusing on consumer needs and leveraging advanced data insights, a more personalized, efficient and rewarding shopping experience is possible, one that simplifies the complex world of credit card rewards and provides consumers with personalized recommendations based on what is best for them at the moment of checkout — and even beyond.

“Our goal is to create a wallet that prioritizes the consumer’s needs, offering personalized and actionable insights into their spending,” Anazodo said. “By understanding what consumers buy at specific merchants, we can provide tailored recommendations on which credit card to use to maximize rewards … For instance, if you just bought a mattress at Casper, maybe you want to buy bedding, and we can deliver a personalized offer to you.”

“We want to work on making your money work for you,” he added.

Embracing a First-Principles Approach to What Consumers Want

Kudos operates by integrating a browser extension that tracks a user’s shopping journey. This approach, which circumvents the integration challenges faced by many digital wallet providers, allows the platform to gain detailed insights into the consumer’s purchase history, even at the SKU level.

Such detailed information, foundational to offering highly personalized advice, is something even card issuers typically don’t have, Anazodo explained, noting that Kudos is working on “integrating offline transactions through Plaid, which will add more nuance” in thinking about card recommendations.

For instance, if a user frequently shops at grocery stores, it would be possible to recommend to the shopper the best credit card to maximize cash back on those purchases. Kudos can also suggest new credit cards that might offer better rewards based on a user’s spending habits.

“We aim to reach a point where our wallet is not just an accessory but a first-class tool that genuinely makes consumers’ money work harder for them,” Anazodo said.

Understanding that consumers are often hesitant to share their financial details, Kudos employs a progressive onboarding strategy. Initially, users only need to specify which cards they have from among the over 3,000 supported. Over time, as they see the value the platform provides, they can gradually add more detailed information.

“We find that within a few weeks, most users are comfortable enough to fully set up their account, providing us with the data needed to give even more personalized recommendations,” Anazodo explained. “Being able to not just understand the consumer, but to deliver value in a very tangible way is important … whenever we push a product, we try to quantify that value.”

Unlocking Digital Wallets Within the Modern Shopping Experience

PYMNTS Intelligence finds that younger consumers, particularly those in Generation Z, think a little more out of the box when it comes to identifying their wish list of rewards.

For instance, 24% of Gen Z consumers would welcome subscriptions or memberships in exchange for card purchases. Flash sales also appeal to 16% of Gen Z consumers, which is notably higher than the mere 5.4% of older generations who are interested.

“Our vision is to unlock what we call self-driving money, where we are building a wallet that just works for you, the consumer,” Anazodo explained, underscoring that because a majority of Americans have rewards credit cards, managing those rewards makes sense as an attractive anchor point.

“Because we are seeing a more complete picture of the consumer, it gives us a lot of capabilities to deliver more … By leveraging AI (artificial intelligence) and a comprehensive understanding of consumer spending, we can offer insights that go beyond simple rewards optimization,” he added.

Looking ahead, Anazodo said that as the company comes off a recent funding round led by content creation platform Patron and QED Investors, it is focused on scaling by “letting the product work for itself … if the product does what it says for the consumer, people will tell other people about it.”