Prio Inc., an Internet company that markets discounts and rewards for shoppers, has built its business through marketing alliances with card companies.
Retailers that enroll in Prio's programs agree to give discounts to customers who buy merchandise on-line or in stores. Customers who enroll in the free service get the discount credited to their card; the Prio system uses the Internet to make sure customers are paid, no matter where a transaction takes place.
Prio, of Mountain View, Calif., has recently signed deals with American Express Co. and Cardservice International - an independent sales organization in Agoura Hills, Calif.-which have agreed to solicit their merchant customers for the program.
Prio also announced agreements this month with two on-line marketing companies, pos.com and Vicinity Corp.
pos, of Sunnyvale, Calif., is a software company that helps companies offer loyalty programs and other services through the Internet. Vicinity, also of Sunnyvale, specializes in what it refers to as "geographically oriented" content and services for the Internet, mostly maps and directory services.
Prio customers can register any or all of their credit cards at the company's Web site. When they make a purchase at a Prio-member store, a discount will promptly be credited to their card account.
"We're integrating the Internet and the credit card structure," said Ashok Narasimhan, chairman and chief executive officer of Prio. The system uses the "credit card relationship as the method through which the rewards are distributed."
Prio also has marketing agreements with CitySearch, an on-line provider of city guides, and Knight-Ridder Inc., the second-largest newspaper publisher in the United States. Both companies are selling Prio's service to merchants that advertise on their Web sites. Prio said additional alliances will be announced soon.
Prio was founded in March 1996, as SaveSmart Inc., and changed its name in April.
In June 1998, Prio launched a pilot program in San Francisco with American Express. The program, "American Express On-line Extras," is up and running in Atlanta and Washington D.C., and is being brought to other markets.
Customers can enroll in the service through American Express' Web site and can select discount offers from 1,000 retailers and restaurants. Once a customer uses his or her credit card at a member merchant and the charge is processed, Prio sends an e-mail message that the discount will be refunded in their next billing statement.
Last November, American Express made a minority investment in privately held Prio.
Larry Kutscher, vice president of interactive enterprise development at American Express, said Prio is a "great way to provide valued customers with extra incentive to shop."
Mr. Narasimhan, a former vice president at Hewlett-Packard Co.'s Verifone Inc. unit, said he is seeking additional alliances with credit card issuers, which can easily advertise the service to its customers through statement stuffers.
"The merchant is offering the value that is being provided," Mr. Narasimhan said. "From a credit card issuer's point of view, it's a good proposition because it increases transactions at little cost."
Mr. Narasimhan said an advantage of Prio's system is the ability to give discounts no matter where a consumer shops.
"There's a much larger pie when you're able to combine the on-line and off-line worlds," Mr. Narasimhan said.
"That gives the consumer the convenience to seamlessly go between the two and not have to make a choice."