Mogl, a startup that's created a restaurant loyalty mobile app, has been gaining credit union and bank partners for its program, which provides cash back for meals out, with the option of donating the money to local food banks.
Financial services partners could benefit by becoming top-of-wallet while also helping to feed the hungry, and in turn, improving their brand images.
Currently, the San Diego startup counts nine credit unions, one bank, and two airlines as partners. Three additional credit unions are finalizing their participation in the program.
Like other rewards apps such as SaveUp, SmartyPig, and The Spring, Mogl requires people to link their cards to the app. Users get 10% cash back when they swipe their connected physical cards at participating restaurants and bars. Mogl says its software works with hundreds of thousands of cards. The do-good twist is that users can choose to donate their cash back to food banks in the area. (An option that can add up: delivering one meal costs about $0.20. In other words, $10 equals 50 meals.)
Participants who have downloaded the mobile app will receive push notifications or texts about the cash back and/or donations. Currently, those alerts work quickest with Visa cards (and can come within minutes of swiping the card), while MasterCard and American Express can take up to two days. Users can pre-set the percentage of cash back to donate on the app.
Unlike some apps that use Yodlee or Intuit to power the user's ability to link in outside accounts, Mogl has users enter in — or swipe in — their payment data. The information is sent to the card associations, which send back a token. Mogl does not store any card data.
Broadly, Mogl is meant to help people "have an easy, easy experience in earning cash back," says Jeff Federman, chief executive and co-founder of Mogl. "It's very 1993 to walk in with a coupon or anything of that nature. Half the time you forget them or are embarrassed to show them."
The mission underscores a growing trend among banks: Merchant-funded rewards are getting modernized for the smartphone.
Bank of America, for example, rolled out BankAmeriDeals to award customers with cash back for their swipes.
Young companies like Fisoc also sell merchant-funded loyalty programs to community banks and credit unions. Mogl offers yet another example of the trend and distinguishes its offering with its charity component and focus on restaurants.
The young company counts more than 2,000 participating restaurants in California and Arizona and says it can launch its program in a new market with 100 users and five restaurants.
To gain users, Mogl stocks restaurants with kiosks that let a person swipe a card to enroll in the program and remove one possible barrier to usage: data entry. The bigger distribution play, however, comes from Mogl forming banking partnerships, including one community bank so far, OneWest Bank.
The financial services strategy helps Mogl acquire users quickly, Federman says.
Credit unions, in turn, get to offer yet another way to give back to the community through a program designed to keep their cards top of wallet. "If you go out to eat, you're thinking about the credit union," Federman says. "It's an increase in interchange."
Ventura County Credit Union in California is one of Mogl's satisfied partners.
"It's one of the quicker and easiest decisions that I had to make," says Joe Schroeder, president and chief executive of the credit union and board member of Food Share Inc., the food bank for Ventura County. "It all lined up."
The credit union counts about 5,200 Mogl users since launching the program in April 2013 and continues to observe membership enrollment growth. (The credit union has more than 62,000 members.) Ventura County Credit Union auto-enrolled cardholders who provided email addresses and hadn't opted out of communications. It's also invested about $20,000 in marketing Mogl.
The credit union's promotions for the program include email campaigns, web banners and in-branch associates wearing t-shirts touting the service. Tellers are happy to chat up the program, and with it, the credit union's cards. "It makes [employees] feel better about the place they work,"says Schroeder.
Only one member has expressed privacy concerns. "It's great feedback: only one complaint," says Schroeder.
The program has the potential to influence members to use the credit union's plastic as their primary payment, he says. Already, the credit union has observed monthly transactions grow among its participating members.
To be sure, members can and do tie other cards to the service — in fact Ventura Country Credit Union encourages the practice. "We want to see the poor and hungry get fed," Schroeder says. "Members get additional value and we help the poor out. It sounds corny but it's what we should be doing: We should be finding ways to give something back to the community and membership."
Another benefit is it benefits the brand. "It's something that isn't political at all," he says. "I haven't found someone who doesn't want to feed the hungry."
And if a person donates the cash back to deliver meals, the tech will "be a gigantic game changer for food banks," he adds.
Though credit unions — not-for-profits — are Mogl's sweet spots, Schroeder sees such tech-enabled loyalty programs coming to financial institutions, too. "I'd be surprised if more community banks didn't do this," he says.
He's looking to broaden the tech-enabled ways Ventura County Credit Union gives back. "I'd love to layer something on top of this," Schroeder says. "I'm looking for something this good in another area to help out the community."
As for Mogl, co-founder Federman says it will raise another round of investment in February as it works to expand into Nevada and Florida and add 10 more credit union partners into its program by the middle of the first quarter. "It's the fastest way to grow customers," Federman says.