Cardlytics converts debit to 'virtual coupon,' builds on Cap One's decoupled debit program

Cardlytics converts debit to 'virtual coupon,' builds on Cap One's decoupled debit program
Tags: Bank / Credit Union, Debit / Credit, North America, Prepaid / Stored Value / Gift Card, Transaction Processing
August 13, 2009 - Tracy Kitten

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Scott Grimes is introducing a next-generation debit-reward program that gives debit cardholders cost-free rewards. According to an article in Digital Transactions, Grimes, who spearheaded Capital One Financial Corp.'s decoupled debit program, is introducing the "next-generation debit rewards" system through his new start-up — Atlanta-based Cardlytics.

The program reportedly enables merchants to fund rewards that will be offered to a financial institution's online-banking customers when they log in to review their bank statements. The system uses the customer's debit card as a "virtual" coupon that can be used to make purchases online or in a store.

Grimes says having advertisers and merchants fund the program is what makes it unique:

We think of banks as our channel partners. The advertisers, the merchants, are the ones who fund the system in essence. They pay the incentives, and they pay us a fee for placing the ad to consumers.

The system includes two pieces of software, an offer-management system and order-placement system. And through the system, no information about individual accountholders ever leaves the FI, Grimes says. The Cardlytics system also supports credit and prepaid cards.