News

BoA to test Groupon-style program

January 27, 2012

Bank of America Corp. is testing a Groupon-style program in three states. The program delivers merchant offers directly to users within their online bank accounts, said a report in the Wall Street Journal.

In the Cardlytics-powered program, deals are pegged to card activity. Customers opt into a deal by clicking on it within their online list of purchase transactions. They redeem offers by swiping their debit or credit card at the merchant offering the deal, instead of printing a coupon or displaying it on a smartphone.

"[Banks] are looking for ways to garner more revenue in the wake of having lost a lot of revenue opportunities over the last year and a half and … engender loyalty with consumers," said Madeline Aufseeser, a senior analyst with the research firm Aite Group LLC. "Loyalty in debit has obviously been hampered over the last year."

Aite Group estimated last year that merchant-funded rewards like the ones Cardlytics is offering to banks could generate $1.7 billion in annual revenue for card issuers by 2015. Most vendors share a cut of 5 to 10 percent of a completed sale with a bank, Aufseeser said.