The prepaid customer base for Cardlytics Inc.'s merchant-funded rewards system is growing.

The Atlanta company said Thursday that FSV Payment Systems Inc., a Houston provider of network-branded prepaid cards and processing services for retail, hospitality, payroll and other programs, is using its technology for targeted offers to cardholders.

The Cardlytics system sends merchant deals to cardholders based on their transaction history and geographic position. People activate the rewards online, then use their cards to make qualifying purchases at a specified retailer.

"This merchant-funded program rewards everyday purchases at places the cardholders routinely frequent, so our cardholders love it, and our prepaid partners love to offer it," Rick Savard, FSV's chief executive, said in a press release. Cardlytics, which also has several banks using its system with their debit or credit card customers, plans to continue expanding in the prepaid market.

AccountNow Inc., a San Ramon, Calif., prepaid card marketer, is to begin offering its cardholders a rewards program this month using Cardlytics' service.