Citi ties ThankYou rewards to Mastercard tech for instant redemption

NEW YORK — Citigroup will be the first major issuer to use Mastercard technology to give U.S. credit card holders the ability to instantly redeem points on eligible purchases online and through a mobile app.

The goal is to better serve digitally savvy customers with a rewards redemption process that operates at the time of purchase. Consumers opt in to receiving push alerts for rewards that can be redeemed above a certain dollar amount, with the rewards applied as a statement credit within three business days after the transaction is completed.

The system builds on Citi's ThankYou rewards program, which initially launched in 2004 as a coalition program. The program has evolved over the years as customer habits have changed, and this new implementation is another example of following those trends.

“The loyalty space continues to evolve, and what we’re finding is that real-time is increasingly important,” Mary Hines, head of customer engagement and innovation for Citi Branded Cards, said Tuesday morning at a media briefing at the Mastercard innovation center in New York City.

In early July, Citi’s ThankYou members will be able to choose to receive push notifications after an eligible purchase either on a real-time, daily or weekly basis.

“Our customers work hard for those points, and we want to make them as rewarding as possible,” she said.

The news comes as Citi is reportedly cutting back on other perks such as free trip insurance and price protection guarantees. Some accounts will also lose car-rental and lost-baggage insurance, Bloomberg reports, noting the changes will take effect on Sept. 22.

Pay with Rewards

Mastercard launched its Pay with Rewards platform in 2014, when it took the form of a mobile app that allowed consumers to choose ahead of time how to redeem rewards for specific purchases.

Hines said Citi found in a recent customer survey that 86% of respondents are more likely to redeem points if they’re able to do so in real time. That figure jumped to 94% for millennials.

“We know that when consumers redeem their rewards, they're more engaged and more loyal” to the brand, Hines said. “We’re finding more and more consumers find value in paying with points."

Mastercard found in its own research that the majority of consumers are frustrated with the points redemption process.

“It was through that lens that we developed a real-time redemption experience,” said Kyle Clark, a Mastercard vice president and senior business leader for global rewards product.

Clark also spoke about the need to personalize experiences and how instant rewards redemption fits into this area.

“Digitally savvy consumers are evolving,” Clark said. “And at the center of this is the idea of personalization: What’s in it for me? Because that factor is what’s driving the adoption of products in the marketplace.”