Consumers may earn rewards, discounts and comparative pricing tied to their purchase histories under a program from BillShrink Inc.
BillShrink's StatementRewards is a transaction-identification program that financial institutions and card companies may integrate into their online banking systems. When viewing their bank or card statement online, consumers may activate rewards based on a customized analysis of their monthly transactions. For example, the service may recommend cheaper gas stations or a gift card for a coffee shop.
Financial institutions and card companies would benefit from StatementRewards because the product "drives spend on credit and debit instruments," said Schwark Satyavolu, a BillShrink co-founder and its chief executive.
The service also may help banks get more business, because some consumers may switch institutions to be eligible for the program's benefits, he said.
BillShrink, of Redwood City, Calif., is in discussions with several financial institutions, which it declined to name.
An icon appears next to each transaction to identify potential savings on specific purchases such as phone bills and fuel, Satyavolu said. Clicking the icon shows a list of pricing comparisons for the applicable products or services.
To redeem a reward, consumers receive a bar code to print out when they click on the icon noted in their online bank account. Consumers also may send the bar code to their mobile phone for use at merchants able to read them, Satyavolu said.
BillShrink said it expects most participants to offer the service for free, but each bank or card company will determine its own pricing, Satyavolu said. The company charges banks and card companies a licensing fee to use the product based on their size and the amount of detail they want in the service, he said.
The fees that participating merchants pay depend on which rewards tier they choose, Satyavolu said. The basic tier, which includes basic targeting and reporting features, is free. But if merchants want advanced targeting and reporting, they will pay a fee by transaction volume.
The reporting component lets merchants see how many customers they have and how much they spend. It also lets them gauge the effectiveness of each rewards campaign, Satyavolu said.
A statement-rewards service may do well in the payments industry, as many rewards programs "are in a state of flux because of the recent legislation regarding debit interchange," said Brian Riley, research director for bank cards at TowerGroup. BillShrink "is just another way to reward consumers and for merchants to increase loyalty," he said.
If banks charge a monthly fee, however, "I'm not sure it would be worth it for the consumer," Riley said. Rewards programs need to stand on their own to compete with other programs that have ties to a card, he said.
They should be attractive to merchants because most merchants already put money into their own rewards or loyalty programs, Riley said.
