Customers often find it inconvenient to carry multiple credit, debit, and rewards cards. One of the world’s largest banking and financial services organizations wanted to develop an innovative platform that would enable merchants to offer customers better payments and rewards solutions.
The bank turned to Alacriti to help develop OptiPay, a new kind of payment platform that combines the best functions of credit, debit, stored-value, and loyalty or rewards cards into a versatile merchant solution. The platform not only gave the bank a competitive advantage, but also enables its merchant clients to offer new incentives and reduce costs.
Expanded
from 141 Stores to 200,000+ Retail Locations
Reduced
Merchant Costs Through PIN-Based Debit Adoption
Background
As debit cards with rewards and loyalty programs continue to gain in popularity, one of the world’s largest banking and financial services organizations decided to develop an innovative payment solution for its merchant customers. These merchants know that consumers who receive rewards through simple, everyday purchases tend to return more often, spend more money per visit, and buy more items.
Overview
Challenge
Retailers typically offer both merchant-branded credit cards and a variety of loyalty programs. Consumers, however, find it inconvenient to carry separate credit cards, rewards certificates, loyalty cards, and coupons from each retailer. This market-leading bank wanted to develop an innovative solution that would enable merchants to offer more convenient payment and rewards solutions to customers.
Solution
Alacriti developed a new type of payment platform that combines the best functions of credit, debit, stored-value, and loyalty/rewards cards into a versatile merchant solution called OptiPaySM. With OptiPay, retailers can give their customers a single card to accumulate rewards and pay for purchases however they choose—via credit, debit, or stored-value.
Results
In September 2007, the bank and CVS Pharmacy began testing the new card at 141 CVS stores in the Indianapolis area. The pilot was a success and CVS extended the card program to more than 200,000 locations in 2008. The bank now has a powerful solution that enables merchant retailers to accept payments in a variety of forms and to directly link those payments with their loyalty/rewards programs.
Business Challenge
Retailers typically offer both merchant-branded credit cards and a variety of loyalty programs. Consumers, however, find it inconvenient to carry separate credit cards, rewards certificates, loyalty cards, and coupons from each retailer. This market-leading bank wanted to develop an innovative solution that would enable merchants to offer more convenient payment and rewards solutions to customers.
How We Helped
Alacriti responded by helping to develop a new type of payment platform that combines the best functions of credit, debit, stored-value, and loyalty/rewards cards into a versatile merchant solution called OptiPaySM.
With OptiPay, retailers can give their customers a single card to accumulate rewards and pay for purchases however they choose—via credit, debit, or storedvalue. Customers can use their OptiPay cards as PIN-based debit cards, resulting in lower transaction fees for merchants. OptiPay boosts customer loyalty by making it easy to accrue rewards, and it increases in-store sales by leveraging individualized purchase histories and shopping preferences so that retailers can offer personalized rewards to their cardholders.
OptiPay continually accesses loyalty-earned balances and includes a web-based interface so customers can view balances, review transaction histories, and initiate funds transfers from their stored-value accounts into their bank accounts. Retailers can create or enhance loyalty/rewards programs without making changes to front-end point-of-sale systems or back-end payment processes.
Alacriti spearheaded the design, development, and implementation of the storedvalue platform, a core component of OptiPay. To do so, Alacriti worked closely with the bank’s internal technology and business teams, as well as with Tempo Payments and Concept Shopping.
The solution’s core components include:
Results
In September 2007, the bank and CVS Pharmacy, the second-largest pharmacy chain in the U.S., began testing the new card at 141 CVS stores in the Indianapolis area. OptiPay links CVS customers’ checking accounts to their CVS ExtraCare accounts, a CVS-loyalty program. Thanks to the pilot’s success, CVS extended the card program to more than 200,000 locations in 2008.
In October 2007, another corporate customer of the bank, a major supermarket chain in the New York region, began using OptiPay to create a new loyalty offering. The store decided to link participating customers’ checking accounts to the chain’s existing “Advantage Club” card to create a store-branded, PIN-based debit card. These customers can now earn additional rewards by using the card, thus increasing their loyalty to the store.
The bank now has a powerful solution that enables merchant retailers to accept payments in a variety of forms and to directly link those payments with their loyalty/rewards programs. To early adopters, the solution’s top benefits have been the ability to offer new incentives to end-customers and the significant cost savings they gain from processing debit card transactions rather than credit transactions
Future Plans
The bank plans to expand the Global Transfers service to support real-time person-to-person (P2P) transfers between the bank’s retail customers, as well as account-to-account transfer capabilities for the bank’s treasury and cash management customers.
