Advances in technology have helped improve all aspects
of the payment process, making each step quicker and more
convenient for cardholders and merchants. In the area of loyalty
programmes, Welcome Real-time has carved a niche for itself as a
market leader in loyalty marketing technology. Victoria Conroy

A recent series of seminars on loyalty programmes hosted by Cards
International and loyalty software vendor Welcome Real-time, which
took place in Poland and Denmark, attracted large audiences of
senior payment industry executives who were all keen to see how
loyalty programmes could be applied to their markets.

As a market leader in developing loyalty technology and marketing
solutions, Welcome Real-time is a pioneer in one of the biggest
emerging trends in loyalty, that of real-time rewards at the moment
of payment at the point of sale. During the series of seminars,
Welcome Real-time showcased how its services and solutions had
helped some of the world’s biggest banks improve customer
recruitment and retention in their card portfolios, a theme that
has become all the more important during the economic turbulence of
the last few years.

The premise of Welcome Real-time’s XLS proposition is that it
enables banks and merchants to identify the customer, and link the
customer to a specific promotion or campaign based on the
customer’s profile and transactional behaviour, including the
number of merchant visits or amount spent. This then allows the
merchant to immediately deliver the right promotion to the right
customer in real-time.

The flexibility of the solution means that several types of rewards
can be offered, such as cashback and POS points redemption, on a
range of payment form factors, including magnetic stripe and chip
cards, contactless cards and mobile payments, and via several
customer touchpoints including POS terminals, kiosks and

BBVA Bancomer, Mexico

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In Mexico, Welcome Real-time worked with BBVA Bancomer, the
country’s leading financial group providing services to more than
10 million customers, to launch the ‘Vida Bancomer’ loyalty scheme
on EMV cards, the first scheme of its kind in Mexico to offer
points redemption, automatic discounts, instant rewards and other
features designed to surprise and delight customers.

The main impetus for developing the programme was to drive
redemption of BBVA’s existing ‘Puntos Bancomer’ loyalty programme.
By implementing Welcome Real-time’s software onto BBVA’s existing
loyalty programme, the bank was able to offer reward redemption at
the point of sale.

BBVA was one of the first banks to utilise the POS as a new
redemption channel, enabling cardholders to exchange their Vida
points at the POS against a full or partial payment of merchandise.
These Vida Points were converted automatically into local currency
during the payment transactions. As a result of the programme
upgrade, Bancomer’s redemption rate doubled in the space of a year,
rising from 17 percent to 36 percent.

Spron, Iceland

The unique characteristics of the Icelandic payment card market
threw up a few challenges for Welcome Real-time and card issuer and
savings bank Spron.

Although Iceland is one of the most card-heavy markets in the
world, with over 2 payment cards per inhabitant and 75 percent card
usage, one of the main challenges facing payment players is the
slow speed of EMV migration in the country – although all cards are
now EMV-enabled, merchant compliance lags some way behind.

Spron’s objectives were to strengthen its card solutions business;
solidify the bank’s reputation as one of Iceland’s leading
financial institutions, and boost the exposure of Spron’s cards
with a unique value proposition. These factors led Spron to launch
a back-end rewards programme, offering cashback on Spron’s ‘eKort’
credit card, the first EMV-enabled card in Iceland. The cashback is
funded by the issuer but also by a coalition of merchants, and
enables cardholders to earn cashback through a network of

Cardholders are entitled to cashback of 0.5 percent of the total
yearly domestic turnover of the card, plus a 0.65 percent – 15
percent additional refund from merchant partners. eKort gives
different percentages of cashback in different merchant partners,
along with numerous special offers giving up to 50 percent
discounts in some cases. As the scheme is a back-end programme,
cardholders receive accumulated cashback in December every year,
with no obligation to spend cash in the merchant outlet.

Just two years after the launch of eKort, Spron decided to merge
eKort and the Spron Icelandair mileage card into one product – the
Vildarkort card, which accumulates both cashback and air miles on
one product and is accepted at between 300 and 400 merchants.

In order to inform Spron customers about the new rewards
proposition, the bank engaged in mobile phone and e-mail
promotional campaigns, alerting customers to special promotions and
also their reward level status. Spron also utilised more
traditional communication methods such as flyers and statements in
order to give more details about promotions and level of rewards

They also used other back-end communication channels like flyers
and the statement in order to give more details about new
promotions and the cash-back accumulated.

In one of the most competitive and saturated card markets in the
world, the implementation of the programme resulted in a
significant increase in cardholder acquisition. In 2007, 92 percent
of cardholders were new customers of the bank, compared to 85
percent in 2005 and 2006.

Spron also saw a spike in card activation rates. In 2006, around 70
percent of Spron cards were active. By 2007, this had increased to
85 percent – 90 percent of cards being active each month. Spron
also enjoyed an increase in market share, with eKort gaining 10
percent market share in just two years.

Alpha Bank, Greece

Alpha Bank, founded in 1879, is the leading private sector bank in
Greece and the second-largest commercial bank in the country.

Its ‘BonuS’ loyalty scheme, combining points and promotions, is
available on the entire Visa, MasterCard and American Express card
portfolios of Alpha Bank. BonuS provides targeted customer insight
to enable the bank to offer targeted messages and rewards.

Before the launch of the scheme, Alpha Bank focused on segmentation
and education of customers so that they would know how to use
points at the POS. Alpha Bank ran a series of TV advertisements
that informed customers of the extra points that could be earned at
key partner merchants on all credit card spend, and also profiled
the merchant partners in the scheme, showing customers where they
could earn and redeem their points.

According to Alpha Bank, this constituted a good example of
promotions that could be run at no cost for the bank and for most
of the time at no cost for the merchants as well. Using Welcome
Real-time’s software, Alpha was able to deliver targeted special
promotions to customers, including exclusive access to sales events
and free merchandise, such as a free coffee or glass of wine at
selected merchants.

Merchants were also able to set up dedicated POS redemption reward
catalogues to motivate cardholders to redeem specific goods. This
worked by selected items appearing on the POS terminal screen which
the merchant could then show to the cardholder.

An additional benefit of offering such an instant rewards scheme is
that banks can also delegate the management of the catalogue system
to the merchants, therefore reducing the operational costs compared
to regular catalogue systems.

Evidence of the success of the scheme came from merchant partner AB
Supermarkets, which showed that the number of transactions and
spending amounts on Alpha Bank cards increased following the
commencement of the programme. Before, 24 percent of transactions
were conducted with Alpha Bank cards – after the launch of the
BonuS programme, that figure had jumped to 43 percent.

The impact of the BonuS programme was also felt by Wind, the
second-largest telecom company in Greece, which saw its churn of
BonuS cardholders reduced by 10.4 percent to just 15.6 percent,
compared to a churn rate of 26 percent for non-loyalty

The BonuS scheme has driven down attrition, driven up spend and
delivered significant benefits to participating merchants. Not only
are redemptions increasing significantly (with a current run rate
of 35 percent), but spend on BonuS cards has risen 19 percent,
while attrition has dropped by a massive 27 percent. The BonuS
scheme has been so successful that it is now being expanded to more
than 3 countries.

Banco Bradesco, Brazil

Banco Bradesco, the biggest private Bank in Brazil, has more than
20 million customers and over 62 million payment cards in the

Despite having such a large number of cards in issue, Bradesco’s
challenges surrounded low product differentiation for credit cards,
with low spending and usage, and the high cost of promotional
operations to boost usage of card products.

As such, Bradesco is using Visanet’s promotional platform and
Welcome Real-time’s XLS solution to launch a new instant reward
programme called ‘Bônus Surpresa’. The programme comprises a
real-time awarding and redemption engine; a segmentation engine
targeting customers; a loyalty marketing tool to manage campaigns,
rewards and partner network, and a merchant tool to increase
customer visits and spend.

The Bradesco programme began with a pilot project involving six
million cards, one of the largest such trials undertaken in South

Barclaycard, UK

In a significant development for the UK card market, in June 2009
Welcome Real-time and Barclaycard announced that they had teamed up
to introduce a retailer rewards scheme, with Welcome Real-time
providing the scheme’s IT infrastructure and underlying software.
The retailer rewards scheme will enable Barclaycard customers to
use their cards and be rewarded for spending at a wide range of UK
retailers, ranging from independent outlets to major chains.

Barclaycard, which has over 11.7 million customers in the UK,
already has close to 90,000 merchant relationships in the UK, many
of which are expected to participate in the programme.

Francois Dutray, CEO of Welcome Real-time, said: “We are delighted
to be working with Barclaycard in the UK to develop a rewards
scheme that will make a huge impact on the British High Street. It
is a great opportunity to develop a scheme with the potential for
millions of customers and many retailers in the UK, whether large
or small.”

InterSwitch, Nigeria

InterSwitch is a leading electronic transaction switching and
payment processing company in Nigeria, and is aiming to drive up
card usage at the POS. InterSwitch, working with Welcome Real-time,
launched a programme that would reward POS clerks whenever they
incentivised usage of payment cards.

Clerks earn points based on the number and volume of transactions
that they can exchange against vouchers or the lottery. Following
the launch of the programme, InterSwitch doubled transaction volume
in three months at one of the country’s largest merchants.

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