Perhaps the issuer can make a counterbid so its plastic remains top of wallet, Vichich says. Or an airline credit card could give a valued cardholder a free drink during his flight.
Vichich plans to release a freemium model (a model in which a free basic service includes charges for higher levels of service) that allows consumers to pay for valuable features in the future. Glyph gets a lead-generation fee from its current partnership with Discover and is pursuing partnerships with other key issuers, Vichich says.
The idea of helping people assess a payment type before they buy something has caught the attention of a number of financial services players, and at least one government agency. The Treasury Department held a contest this fall to help develop new ideas aimed at helping Americans gain better control of their finance through the mobile channel.
The financial technology vendor Banno announced a Help Me Decide feature for its mobile app, Grip, at FinovateFall in New York. Banno sells Grip to banks.
Rather than focusing on which credit card gives the best rewards, Grip's Help Me Decide feature takes into account more consumer data sources, such as the average payment made to a credit card, to help a user see what effect buying an item has on his finance before he buys it. Simply put: the interest rate could cost the consumer more than the reward.
"That's how we select the best," Wade Arnold, Banno's chief executive, tells Bank Technology News.
"Overall," Arnold says, "consumers don't think about the total cost of ownership when they put something on their credit cards. ... The traditional banks can do a lot by showing these insights to their consumers."
The consumer would scan an item with his smartphone, so Grip can offer him advice before he buys a discretionary item. Arnold says he thinks consumers would first use his service for pricier discretionary items, such as electronics.
"It's more of a large-ticket item that could disrupt the cash flow," he says.
The startups' offerings reflect trends in card-user rewards.
Rewards "have become more complex" in the last five years, says Andrew Davidson, senior vice president at Mintel Comperemedia, which tracks the amount of promotional direct mail credit card companies send.
Davidson says that such mobile apps could encourage consumers to favor certain cards over others.
"The bigger shift," he says, concerns the ways in which these types of apps affect consumer attitudes about rewards and the implications for the "ongoing battle for share of wallet."
Consumers are getting advice on which credit cards offer the best deals. Banks would be wise to participate.