UMB Bank Builds On-Demand Rewards Choices

Print
Email
Reprints
Comment
Twitter
LinkedIn
Facebook
Google+
Partner Insights

Two buttons with corresponding LEDs that light up when pressed on either side of Kansas City, Mo.-based UMB Bank's ePlate Visa credit card allow users choices from over 30 different "experiences" offered in the $13.3 billion regional bank's rewards program.

So each time cardholders make a purchase, they can dedicate their spending to earning value towards whichever of the two products, services, charities or entertainment they seek as rewards for their spending. Cardholders also can immediately receive points.

UMB's ePlate users go online, either via their computers or smartphones to select their two choices from an interface called Experience Manager. Included among the 30 or so different options from which to earn points to redeem rewards for "experiences" is an African safari put together by Henry Cookson Adventures. Another is to dedicate spending to go toward the purchase of a gift for the Toys for Tots program. One's adventurous or charitable selves can be merged on the card, and the choice to give or receive can be made at the checkout counter.

The pitch to businesses, the so-called "experience providers": Narrowing the options to two on the card pre-transaction helps companies enforce more control over loyalty, and enable more precise targeting and tracking of new existing customers. And UMB can offer a single product that contains multiple co-branded rewards.

While traditional rewards and loyalty programs offer similar rewards, they often leave it to consumers to decide post-purchase which they will redeem and when. Monthly statements can be ignored for a long time before the consumer decides to use accumulated points to make a purchase or redeem an award. That can result in more diffuse or passive marketing opportunities for participating companies. Having to select from two companies' offerings prior to purchase enables much more direct opportunities for businesses to connect with customers and build brand loyalty.

"In traditional reward programs, you typically earn points that come to you every month in a statement," says George Schmelzel, senior vice president of UMB Credit Card Services. "Many consumers don't track those as well as they can with [ePlate].

"What we're looking for is 'experience providers' - B-to-C businesses with strong brands, strong value, or a unique niche that have compelling offers and products that we can help communicate to end-consumers," Schmelzel says. "The experiences themselves can be tailored in such a way where they could do something pretty meaningful for a customer to try to get them targeted at one particular event, for example." That event could include travel, a concert or both.

Both the card and the platform are built by Pittsburgh-based Dynamics, which also supplies Citi's 2G cards, on which users can press buttons to pay either with accumulated points or credit. For ePlate, businesses providing rewards are rebated on interchange fees by 50 basis points for each transaction in which the system is used. If a consumer allows it, reward providers are also given that customer's purchase data, so participating businesses can tailor marketing to consumers.

Dynamics provides businesses with a developer's toolkit to create or modify rewards to offer customers. A business that's developed an application to offer ePlate rewards that earns $5 on a $1,000 customer transaction, for instance, can choose via the system to use that $5 to provide targeted discounts or other exclusive content back to the consumer. Or businesses can give a "statement credit" to the cardholder, like $10 when a consumer spends $100 at a store. Dynamics' tool can also allow a charity to add a consumer-approved $1 donation to every purchase.

UMB's ePlate Visa cardholders can track the status of their spending progress in pursuit of rewards or gifts either by going online to check the interface or via email alerts, if the rewards provider enables notifications.

The firms worked in earnest over the last two years to get the first generation of the platform launched in October, Schmelzel says. Both the bank and Dynamics envision big things for the system, including mobile payments: Instant rewards means a developer can use purchase data, including time, place and location, to send targeted enticements like movie or game promotions to specific consumers.

"The goal is not unlike the applications that you might see on the iPhone or other smartphones where consumers can go in and tailor their experiences," Schmelzel says. "This can integrate their payment activity into their real-world experiences within a large ecosystem. Conversations are going on now with hundreds of experience providers."

 

 

CASEFILE

BANK: UMB Bank

PROBLEM: How to differentiate credit card loyalty programs?

SOLUTION: Make rewards instantaneous, selectable on the card itself.

JOIN THE DISCUSSION

SEE MORE IN

Five Mobile App Features that Show Yes, Banks Can Innovate

Fintech startups claim to out-innovate banks. But financial institutions sometimes break new ground. Here are five examples of banks that are testing and launching mobile app features capable of much more than showing an account balance.

Image: iStock

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.
Already a subscriber? Log in here
Please note you must now log in with your email address and password.