Innovative Card-linked-offer platforms are gaining market share in the United States

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Card-linked offers, aka merchant-funded rewards, are an interesting niche area for financial institutions to gain customer loyalty. Credit card rewards programs often play a significant role in attracting users to a particular card against its competitors. However, for fintech companies newer to the card issuance market, setting up an attractive rewards program is difficult. Specifically, it requires the issuer to negotiate with individual retail partners and many more allied complexities. Here comes the role of card-linking-offer platforms which streamlines the process for card issuers, thus designing a customized rewards program tailored to the particular customer base.

In the meantime, card-linking-offer platform companies are getting more advanced, with better targeting options, increasing sales measurement and also wallet-share analysis. With more financial institutions widening their customer base and associated transaction data, the industry attracted marketing spending that had previously gone to mail and other digital channels. For instance,

• The United States-based rewards-as-a-service API platform, Kard, deals with several brands to promote their brand through a rewards program. Specifically, this helps the new issuer to integrate Kard's offerings with the rewards into the issuer's own user interface.

The start-up saw significant growth in business with 30 issuers, ranging from traditional banks and neobanks to banking-as-a-service fintech companies. On average, the platform processes around 60 million transactions every month, and the revenue figure also grew nearly ten times as compared to 2021. 

Kard serves both the merchants from the supply side and the card issuers on the demand side. For issuers, the platform helps them to connect to merchants, brands, and retailers, which act as the funding vehicle for any rewards programs. On the other hand, the merchants partner with Kard to help drive customer acquisition. Here is where the platform earns revenue. With each merchant Kard chooses to work with, it makes a revenue share agreement with the company and charges them on a performance basis. If the platform can drive transactions for the merchants, then only Kard gets paid. Because of its modern rewards platform, unique merchant partnerships are experienced by the platform. For instance, 

• Varo, the first digital national chartered bank in the United States, partnered with Kard to launch a cashback rewards program for the bank. Kard designed Varo's new Cashback Perks program is designed to earn easy cashback rewards on online purchases every day through Varo app.
• This partnership strengthened Varo's position as a digital banking innovator, bringing better technology and total transparency to the customers.
• Since, the staggered rollout that started in May 2021 was very successful, the rewards program was expanded everywhere, from participating merchants across all spending categories to in-app integration.

Moreover, Kard, also provides the issuers with rewards such as crypto, fractional shares of stock, lottery tickets and incentives from local small businesses. Since Kard is democratizing the rewards space, more and more banks and card issuers will be able to launch unique card loyalty solutions as per the customer demand.

Due to its modern rewards platform, in April 2022, the company announced that it had raised a US$23 million Series A funding round led by Tiger Global, with participation from new investors Fin Capital and s12f. These fresh funds will be utilized by the platform to expand its merchant network and to launch new reward and loyalty-related offerings in the market.

Kard enables issuers to develop unique loyalty experiences by leveraging Kard's APIs and network of retail and merchant partners. Therefore, the cardholders can earn instant cashback, fractional shares of stock, redeemable points, and also cryptocurrency. Since Kard handles the full backend, the issuer partners can build personalized experiences for cardholders, generating revenue in business. As a result, it is projected that Kard will attract significant customers through its innovative and easy-to-use platform, driving growth in its business.

To know more and gain a deeper understanding of the United States loyalty programs market, click here.