When performing at their highest and best level, the various rewards points offerings designed by card issuers can be very sticky engagement tools for consumers, turning their card spending into a method for generating value. The problem is that those programs often aren’t performing at their highest level, top executives from Visa and novae told Karen Webster in a recent conversation.
Ruben Salazar, Visa’s senior vice president and head of product and solutions for Latin America and the Caribbean, and Sergio Arana, novae’s founder and CEO, said points have a tendency to sit under-utilized by consumers, who often forget the programs even exist. They agreed that the trouble involves fragmentation and accessibility.
“The fragmentation of technology is incredible, with multiple players offering multiple options for types of reward systems – miles, cashback, points, etc.,” Salazar said. “But each has different limits on use, and there [is] no single, seamless redeeming activity empowered by technology to make it easy for consumers to use them.”
But he said that Visa and novae are currently collaborating on the My Rewards app, a platform that will bring all of those rewards offering together. That will allow consumers to use rewards how they want, on the goods they choose, in whatever channel they prefer – physical or digital.
Arana said Visa and novae are confident about the move, because the market is coming to something of a strange inflection point, particularly in Latin America. Everything suddenly seems to be in motion in the commerce ecosystem, across consumers, merchants and payment methods. Evolutions in behaviors and processes once measured in years now take only months or weeks.
That means those who want to stay in the game and remain relevant really have only one option going forward: “Around the world, we basically have to follow what’s going on with consumers,” Arana said. “What is their behavior right now? Loyalty has to follow the customer so they can use what they want to pay, any time and in any kind of transaction. So, we had to adapt the platform to have the technology to allow the user to do that.
“If you are in your home and you want to do an eCommerce transaction, we have to be able to do that,” he continued. “But if you’re going to the store, we have to provide contactless technology that allows you to make that transaction.”
And Visa and novae have to make it possible to do so with various forms of loyalty points that customers have accrued.
The Launch Of My Rewards And Universal Access
The basic concept of the My Rewards app is simple: It creates a single location to file all of those acquired miles, points and cash-back rewards, allowing consumers to convert them into a digital currency that they can spend wherever they choose.
Consumers can shop online, pay bills or even transact at a brick-and-mortar grocery store by leveraging NFC and QR code technology. If the store accepts Visa, Salazar and Arana noted, then it can accept a novae payment.
Moreover, Arana explained, the app allows shoppers to customize how they want to spend. If a customer attempts to make a purchase and their points balance is insufficient, the app will automatically move the leftover balance to their card on file within the app. And if customers decide post-purchase that they’d like to reallocate that split of points and other payment methods, they can do that from within the app as well.
Arana and Salazar said that ability to use points, both universally and customized, opens rewards to the everyday expenditures where they were rarely used before, because there was no easy, direct way to do so. And that, Salazar noted, creates the right set of synergies to leverage loyalty and rewards as a true tool for consumer engagement.
Traditionally, he noted, rewards have been more directly tied to the purchase of big-ticket items. But the ability to easily tap rewards to pay online or in-person for everyday expenditures can encourage card usage throughout Latin America.
“The consumer can use [points] for coffee in the morning or to pay the bills,” Salazar said. “That’s a fantastic way of activating and promoting consumer engagement.”
With so much in flux and so much having already changed throughout Latin American, making broad pronouncements on what will come next is very challenging.
That’s because the answers can be far more regional, demographic and even individual in many cases. The goal, Arana and Salazar agreed, isn’t to try to foresee where people are going and then attempt to get there ahead. Instead, it’s to assume they’re going just about everywhere –and to be present and ready when they arrive.
And arrive they will, because consumers’ shift toward digital and contactless payments is already underway throughout the region – and all parties know it, Salazar said.
“I think what we are learning from the pandemic is that in almost every single industry, eCommerce and digital engagement are becoming a huge competitive advantage for those who are embracing this transformation,” he said.
Arana noted that the My Rewards platform is, at base, designed to make that transformation simpler and more seamless for consumers. That goal must guide the entire industry’s attempts at evolving for a digital future.
“At the end of the day, we need to follow the consumer and the consumer’s behavior,” he said. “And right now, they are telling us that we need to incorporate the opportunity to redeem universally and contactless.”