First National Bank of Omaha will be the first major financial institution to extend Cardlytics Inc.'s online merchant-funded rewards system to credit card customers.
Most of Cardlytics' clients offer the service to holders of debit cards, but prepaid and credit cards are attracting interest from banks, said Lynn Laube, a Cardlytics co-founder and its president. "We expect to see more credit card program adoption over the next year" as more merchants test it, she said.
With Cardlytics' system, cardholders can receive cash back on specific merchant-promoted purchases offered through online banking. To initiate a purchase, consumers click on a merchant offer within their banks' website and receive the merchant-funded cash-back rewards in their accounts within 60 days of the purchase. Merchants craft offers based on cardholders' past purchases.
First National Bank of Omaha, a unit of First National Bank of Nebraska Inc., already offers Cardlytics' service to prepaid and debit customers. Regions Financial Corp. of Birmingham, Ala., also offers Cardlytics' service to its debit customers, and several other large institutions are testing the program and plan to announce similar rollouts in the next several months, Laube said.
The response rate for most cardholders at banks offering its rewards programs is about 30%, and the bank customer opt-out rate is about 5%, she said.