Smart card coalition loyalty programmes to come

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By: Wise Marketer Staff |

Posted on December 30, 2002

Smart card coalition loyalty programmes to come

A new business model, with accompanying chip card technology, is being put forward by Smart Chip Technologies and SHC Direct as a platform for smart card-based coalition loyalty programmes for the financial and retail sectors, featuring real-time reward redemptions.

SHCDirect (SHCD) and Smart Chip Technologies (SCT) have signed a joint marketing and integration agreement, through which the two companies will co-market and link their loyalty systems to create a new business model for smart card-based coalition programmes.

As reported by The Wise Marketer on October 24, 2002, the smart card is rapidly becoming a technological target for the loyalty industry. The introduction of real-time redemptions at the point of sale may be perceived by many consumers as a big advance because they don't have to wait for vouchers or subsequent purchases to take advantage of offers and discounts.

"Coalition-based loyalty reward programmes tend to offer members the greatest selection of participating merchants, along with flexible redemption options, and are among the most powerful incentives merchants can use to build customer loyalty," explained Lester Deck, vice president for SHCD.

Integration The integration of the SCT smart card loyalty system provided the platform which allowed the new secured, smart card-based incentive system to be brought to market rapidly, while many of the two firms' clients are already implementing compatible point-of-sale (PoS) systems.

SHCD is a descendant of business-to-business firm, S&H Citadel, and has its roots in S&H Greenstamps (one of the early loyalty currencies). The company currently designs and manages rewards programmes for a number of credit card issuers.

EMV deadlines With credit card issuers worldwide facing EMV (Europay/Mastercard/Visa) compliance deadlines, the new system can help them to begin converting loyalty applications while still using magnetic stripe cards, with the option to easily upgrade their cardholders to smart cards without interruption of key rewards programmes.

The two companies are currently finalising the details of their agreement, reseller terms, and licensing issues. The final package will include licensing of Smart Chip Technologies' loyalty system and business process patent, 'Method and System for Allocating and Redeeming Incentive Credits between a Portable Device and a Base Device', in order to expand SHCD's existing loyalty programmes to the smart card platform.

For more information: ·  Visit SCT at http://www.smartchiptechnologies.com ·  Visit SHCD at http://www.shcdirect.com