As consumers start to make purchases from their mobile device, making it to the top of a customer's digital wallet will be ever more important to financial institutions. Delivering spend management advice could be key to achieving that coveted top-slot position.
One business taking this approach is Glyph, a Detroit-based startup that designs consumer-facing software that suggests which credit card to favor based on the rewards tied to the plastic and the purchase category the consumer makes at checkout.
"We are building piece of wallet," Mike Vichich, chief executive, tells BTN. "We want to provide the intelligence."
Glyph, which supports more than 300 cards, announced Wednesday the release of an update to the iOS app it first launched last November. The mobile app works like this: After a user tells the app which type of credit cards he owns, he can tap on a button labeled "Guru" to get payment guidance. The app uses the smartphone's GPS to map out nearby stores and ranks the credit cards to use at each one from most rewards for a category, like gas, to the least. Guru also makes recommendations for online stores.
In its inaugural design, Glyph required users to manually enter some data in order to see which credit card offered the most rewards for buying something. "Frankly, we knew it wasn't an ideal situation," says Vichich.
With the update, that physical labor goes poof so long as a consumer connects his financial accounts into the app through a button labeled "wallet." Yodlee powers the financial account linking. "We are able to link and show credit card balance, limit and utilization for each card in the wallet," he says.
Vichich ultimately wants to build a platform like Google AdWords where issuing banks could bid for individual consumers' business. "That's a longer-term vision of Glyph," he says.
Wallaby Financial, of Los Angeles, offers consumers an iOS app designed to maximize credit card rewards. [http://www.walla.by/] Banno, a financial technology company out of Iowa, also offers a service designed to influence which card to throw down at checkout in the mobile app it sells to banks.
Glyph also announced Wednesday an invite-only web app meant to help consumers source the "perfect three" credit cards based on criteria like personal spending patterns and reward preferences, says Vichich. To use it, a consumer must link his financial accounts to Glyph.
Along with Glyph's credit card suggestions come facts about the cards, including: what purchase category each is best for, annual fee, APR, rewards, currency, perks and a link to an online application. If the credit card suggestions lack appeal to the user, he can click on the categories he likes best, such as hotel points, to receive different options.
Glyph does get a cut from some issuers when consumers are approved for their credit cards. Even so, Vichich says the recommendations are unbiased.
Credit card experts point to payment recommendation apps emerging as evidence of an increasingly complex reward market. "Reward cards are somewhat confusing. These apps are meant to help guide [consumers] through the process," says Bill Hardekopf, chief executive of LowCards.com.
However, Hardekopf points out how issuers are primarily targeting individuals with good to excellent credit scores with their reward-linked products. He also highlights the need for consumers to pay off their credit card bills every month to benefit from the rewards associated with the products.
"There's inherent risk. Anytime you can't pay off rewards in full, all the rewards you are getting are more than eaten up by the very high penalty of APR," Hardekopf says. "You'll be a big loser."