First Data Resources of Omaha said it will introduce a service for credit card issuers that will let them tailor promotions to individual cardholders.
Merchant clients have used the service, called Transaction Level Processing, for years.
With this service, said First Data, a unit of First Data Corp. of Hackensack, N.J., merchants and issuers can offer such special deals as rebate chocks, payment deferrals, and one year without interest charges.
The service "reinforces the value of the credit card," said John Linton, First Data's director of product management. "It allows the merchant and the issuer to increase sales."
For example, if a cardholder has a choice between two stores that sell the same merchandise, but one store is offering a period of interest-free charges or deferred payments, the customer will likely respond to the better offer.
Transaction Level Processing allows issuers to customize programs to accommodate many merchants, First Data said. Issuers can maintain records on up to 50 separate Sales promotions per cardholder account, while maintaining the cardholder's traditional revolving balance.
Mr. Linton said the service is especially advantageous in situations where the merchant and the issuing hank are both First Data clients, because the two could forge a partnership to build sales volume.
For example, merchant-acquiring banks could offer a lower processing fee, or merchants and issuers could collaborate on advertising.
In addition to partnerships, Transaction Level Processing can be used to track consumer spending patterns, information that issuers could use to tailor their marketing efforts to individual cardholders.
First Data is also enhancing the merchant version of the service to offer more options by yearend.
Mr. Linton says the service is unique and "will give issuers greater flexibility and targeting capabilities as they market their card programs.
