MasterCard Inc. is trying to get into cardholders' heads with its new online shopping portal.
MasterCard MarketPlace, announced Friday, is designed to offer discounts from participating merchants based on preferences set by users and data mined from their previous purchases.
The Web site uses behind-the-scenes technology from Next Jump Inc., a New York company that develops predictive analytic software.
The idea is that by better understanding consumer tastes, MasterCard could increase the likelihood that cardholders will make purchases and drive up transaction volume, an attractive proposition for issuers in light of regulations threatening banks' card revenues.
"It really provides the consumer a very, very unique and highly personalized shopping experience online," said Josh Peirez, group executive of innovative platforms for the Purchase, N.Y., payments company. "It also gives them the ability to find those things online and redeem them in the physical world."
A promotional campaign for the free site is expected to launch today.
MasterCard, which has signed a three-year partnership agreement with Next Jump, said the shopping portal is the first of several targeted marketing products it expects to roll out this year using Next Jump's analytics technology.
MasterCard and Next Jump already are working on a mobile-app version of the shopping portal, Peirez said in an interview Friday. "There's a lot more in the pipeline," he said. The companies would not provide details about the value of the contract.
Brian Riley, research director of the bank cards service at TowerGroup, said the partnership could allow MasterCard to help issuers develop new sources of revenue. A regulatory overhaul is forcing banks to rethink their business models, and many are looking for new services that can attract customers and drive up volume.
"You're going to see some radical changes over the next two to three years," Riley said.
To use the MasterCard MarketPlace, consumers must enroll their MasterCard debit, credit and prepaid cards.
To highlight offers most relevant to specific cardholders, Next Jump collects information that pares down the brands, product categoriesn and price points that interest them.
The site lets users specify their "likes" and "dislikes," as well as how much money they are willing to spend for certain brands, said Charlie Kim, Next Jump's founder and chief executive.
Participants also can opt in to receive alerts about special promotions.
For instance, if Brooks Brothers was offering a 25% discount for a certain period, a cardholder could enroll to receive a text alert or e-mail notifying them about the promotion.
In addition to the "personalization engine," MasterCard MarketPlace has a "recommendation engine" that helps users see the most popular items and deals in their area.
The idea behind the technology is to simplify the shopping experience for consumers, who are bombarded with millions of choices, Kim said.
"Less is more today," he said. "More is not better."
The MarketPlace site "reverses the entire process" for the consumer, Kim said. "Rather than putting the hard work on the consumer to find exactly what they want," MasterCard MarketPlace finds it for them based on their tastes.
Kimi likened the site to a hotel concierge service, which would "never bombard you with six million restaurant recommendations for dinner," he said.
Merchants can also fulfill consumers' preferences, so if a user says she is interested in a certain type of product within a price range, a retailer can match that.
Because of the ability to collect and analyze such data, "our programs have the highest conversion rates out there," Kim said.
Average conversion rates are 11 to 1, meaning for every 11 visitors to a site one makes a purchase.
"I've never seen anything that good. That's very powerful," said Karl Rexer, the president of Rexer Analytics, a Winchester, Mass., data mining and consulting firm that has worked with banking and technology companies.
High conversion rates are elusive because it is tough to gain access to detailed spending data, he said. "You usually don't have data that's going to be as specific to the individual as what" Next Jump "has available," he said.
The portal could provide a competitive advantage for MasterCard, which trails Visa Inc. in market share, Riley said.
Other card providers and issuers have started created online shopping portals for their cardholders.
Visa last year rolled out Rightcliq by Visa, a shopping tool that helps connect consumers with retailers.
The Rightcliq Web site does not use a consumer's transaction history to tailor product offers, but that is something the card provider has considered adding, said Gerry Sweeney, Visa's head of global e-commerce and authentication.