Visa Incentive Network - Helps Manage Cardholder Rewards

"Cardholders tell us they value payment cards that provide them with rewards, and merchants tell us they want opportunities to most effectively target cardholders who would appreciate their offers," said Elizabeth Buse, executive vice president, Product Development and Management, Visa USA.

"With the ability to manage rewards and services at the individual account level, Visa has given the payment industry a highly advanced tool for meeting customer demands. We are increasing the ability for issuers to deliver rich and personalized rewards, and at the same time, increasing customer loyalty for merchants."

This upgrade represents a fundamental shift in how Visa manages benefits and opens up the possibility for issuers and merchants to deliver individually tailored offers to their customers.

The new processing capability is an improvement over current capabilities, which require management of benefits at an aggregated level based on clusters of cards within the same account group. In addition to increased customer loyalty from personalized rewards and account services, this step will alleviate the need to change a cardholder's account number simply because the product has changed.

Visa's systems upgrade has also enabled Visa Incentive Network (V.I.N.), which helps merchants tailor discounts and promotions to the most interested cardholders. Instead of grouping cardholders by pre-selected reward categories, merchants and card issuers can, in the future, offer dining promotions to cardholders who are avid restaurant-goers, discounts to consumers who prefer boutique shopping, or special offers to frequent travelers. Because offers can be better targeted toward cardholders who are most likely to take advantage of them, Visa systems upgrades will save card issuers and merchants on marketing costs while making rewards programs more attractive to cardholders.

"Today's cardholders expect unique and tailored solutions," said Buse. "Visa now allows issuers and merchants to deliver on that expectation. This upgrade increases the value merchants and issuers can offer, helping each build lasting, personalized relationships with their customers."

Potential benefits to cardholders, merchants, and financial institutions include:

• Relevant offers to cardholders. Consumers benefit from rewards and services that are personalized and tailored to their specific needs.
• Decreased marketing costs. Merchants benefit by being able to more accurately target consumers with tailored promotions. They also will enjoy greater customer loyalty and access to cardholders who are likely to take advantage of their products and services.
• Increased card usage. Issuers benefit by being able to offer personalized rewards programs that differentiate them from others in the market and through increased card usage as cardholders are encouraged to use their cards to avail themselves of promotions and privileges.

"The level of flexibility in Visa's payment network, VisaNet, creates opportunities for merchants and issuers to build their own capability for the card, differentiating them in the marketplace," said Jim McCarthy, Visa's senior vice president of Consumer Credit.

"This will be great news for consumers -- who see rewards as additional value for using their cards -- because they will see new rewards programs that are dynamic enough to keep pace with their changing interests and lifestyles."