Card Linked Offers

discerning the right strategy


By Bish *


Unbeknownst to most consumers, spending incentives historically offered by credit card companies (such as 1% cashback on all card spend) are not primarily funded by merchants but rather funded by a mixture of the card issuers' own marketing budgets, their interchange, APR on the borrowed money itself, or annual fees paid by cardholders. 


In 2015, new laws come into play which mean interchange rates, and with them card scheme and card issuers profits, are dropping.As a result of these laws most major  card schemes, banks and card issuers are looking for new revenue, and reducing or entirely cutting their internally funded spend incentives. For example Capital One cut its cashback programmes in April.


The idea of merchant funded card rewards (CLO Card Linked offers) is gaining massive traction in the banking, retail, and marketing world, and so it should. Merchants have always offered discounts to get bums on seats and customers through their doors. Now they can do so, in a more intelligent and targeted way.


In the United States this type of marketing has proven very successful, yet in Europe access to the comprehensive transaction data required to implement card linked offers, as well as merchants fear of cannibalisation has to date prevented many merchants driving incremental sales through this medium. 


As awareness of the opportunity which CLOs present has grown, card schemes such as VISA, American Express and MasterCard, issuing banks and prepaid card companies, 3rd party APIs, cashback and offer publishers, affiliate networks, terminal providers, PSPs and acquirers, are lining up to see who can make the most money from them and fighting each other for access to the marketplace.


The whole market for CLOs is so new that it can be hard to fully grasp it, and because the space is so new no-one has really thought ahead to ensure that merchant's interests really come first.cashbackAPP is different. It is working hard for merchants, to give merchants a platform which works for them, and for their customers, both in the short and in the long term.A confident assertion, yet one which it feels justified in stating.


I understand that in order to discern why cashbackAPP is the right choice for your business, it is first of all important to understand a bit more about CLOs and the different solutions that are, and are becoming available. To this end I have prepared the following information for you which I hope will provide a fair and balanced description of the industry.


*The following information is presented as a blog post by it's author, and does not necessarily reflect the views of this company. It is the author's own opinion, developed over time, having enjoyed examining the CLO space, and he hopes you will find it useful. In the interests of transparency however, and because he obviously cannot know the whole truth about any of the companies or solutions he comments on below, please conduct your own research and do not wholly rely on our judgements. 


Overview of Card Linked Offers


Card linked offers require three components in order to operate.


1) Cardholders who want (and can) redeem a Card Linked Offer.

2) Merchants who want to provide a Card Linked Offer.

3) Transaction data for matching the transactions of Cardholders and Merchants .


Let's start with cardholders 


It stands to reason that there are two main ways for CLO companies to gather cardholders.


 1) Working with a bank to auto-enrol, or guide their cardholders to register 

 2) Incentivising cashback and offer websites to enrol their customers.


In America (where card linked offers first gained traction) many CLO companies target banks, with the premise of adding value to their card base by adding rewards to it. Once the bank is signed up they seek to gather merchant offers to fulfil their obligations to the bank and the bank's card base. The bank also provides space on their online banking websites where users may click to activate an offer. Some companies of note are Cardlytics, Cartera Commerce and Edo Interactive.


The advantage of merchants working with such organisations is that they have a large card base automatically enrolled, they can give the merchant exposure on the bank's websites, and perhaps more importantly the transactional card matching data can also be provided by the bank. In effect these types of organisation have all three elements necessary to operate Card Linked Offers effectively. There is also, as with most CLO products, no POS integration required.


The disadvantages of working with such companies are that, in most cases, cardholder data is anonymised meaning that the company, and therefore the merchant, has no knowledge of who each cardholder actually is or any future interaction with them. Furthermore, in many cases it is bank account data that is used to match transactions, not card data, meaning that specific stores may not be identifiable. SKU level promotions are also rarely available as the data comes from the bank not the POS in order to match to a basket. Moreover users, in the main, have to click statements in order to activate offers. This isn't exactly a seamless, user friendly, process. Checking your bank statement each time you wish to activate an offer isn't exactly the most exciting promotional environment.There are also, rarely enough offers present in this model to fully engage cardholders.


Finally, the merchant is only promoting to the cardholders of a specific bank, group of banks, or card scheme.




A user, identified using their specific transaction history, of a specific bank, logs into their online banking account. The user sees a merchant offer listed, they have to remember to activate it, and then next time they come into the merchant's store and pay with their card they collect the offer.  


Typically merchants are billed a predefined percentage of the sale made, which is passed to the customer who redeems the offer, as well as a fee to the bank, or the representative of the bank, for listing the offer.


The commercials are usually presented as a "campaign" with a fixed budget where the merchant pays only when a sale is made, for a pre-defined number of transactions. Sometimes therefore prefunding of a campaign is required.


Merchant: “Sounds good, I only pay when sales are actually made, and I know that the cardholders who have the chance of redeeming my offer have never used me before. Do I get to see who redeem my offers Mr CLO Company?” 


CLO Company: “No No No, that data is strictly anonymised for security purposes Mr Merchant, however the evidence is clear. Compared to a “control group” of similar users we are providing you with incremental spend.”


Merchant: “Oh!”


Without merchants undertaking their own data analysis it is almost impossible to determine if this incrementally actually exists or if the evidence to support incrementality is hand selected in order to justify an advantageous position for the bank or its representatives.


We’re not suggesting underhandedness here, just pointing out a potential loophole - a control user group is not the same as the actual redemption group!


As a side note, European law seems to suggest that unless an offer is made available by a merchant to ALL of its customers; to its entire customer base (which of course transaction based offers are not) the offer itself could be deemed unfair and therefore possibly illegal - effectively bringing transaction history linked offers into the scope of bribery law, and the merchant under the threat of huge fines.  The jury is still out on this one, but the financial implications of getting this wrong could prove to be disastrous. This fact is even more interesting as VISA Europe moves towards introducing CLOs in the next year, using EDO's technology (based on transaction history) to do so.


Add to card offers


Independent data aggregation companies such as Yodlee, Intuit and, more recently in Europe, the Open Bank Project were able to provide CLO companies with access to account level data through a mixture of direct connections with banks and screen scraping solutions. Because of the way their data is gathered these companies required consumers to link their online accounting logins, rather than simply link their card number. Whilst this method of data aggregation definitely has its uses, CLOs have tended to move away from them in recent times.


In America where companies like VISA and MasterCard, TSYS, American Express and First Data moved to provide APIs of transactions to third parties, some companies were born which having integrated these data sources, were able to work CLOs in a more open, non bank specific, manner. They can have a customer register their card, and a merchant register their Merchant ID, and match the transaction between the two using the PSP or Acquirer card transaction data, thus enabling an offer that is consumer, not bank led. 


In America, companies such as Card Spring (recently acquired by Twitter) and Linkables started out this way and similarly in Europe organisations like Reward (the pioneer of CLOs in Europe) and more recently Birdback work in a similar manner. As they integrate data sources they then began to provide APIs of their own, allowing offer websites to recruit userbases for them, promote merchant offers through them, and by doing so offer promotional scale to merchants.


The advantages of a merchant working with these types of companies are they are not limited to a single bank's customers, or marketing channel. Typically offers promoted through them have higher cardholder engagement, as cardholders register through websites and loyalty programmes they are already involved with.


The negative aspects are that these companies are heavily reliant on the users (and in some cases merchants) gathered by 3rd party websites. To counteract this, they have/may start gathering merchants and cardholders directly, which potentially could cause complications as they become competitors to their own publishers.  If their publishers move away from them, merchants may not get the awareness they would like. Moreover, with more and more publishers recruiting card holders the problem of double card registrations through different publishers began to raise its head. And then, double card registration through entirely different organisations.


What we mean by this is that if a merchant partnered with two or more of these types of company, the same customer may have registered his card with both of the organisations. In this instance the merchant, if it isn't de-duping its own sales, could be billed twice for the same sale.


As an aside, this "double payment" problem also occurs for merchants which use affiliate networks to drive sales, and are already paying an affiliate network a commission. If a customer clicking an affiliate network's link has also registered a payment card for discounts / cashback, the merchant could end up paying commission twice. The B2B arm of most high street merchants sells gift cards or prepaid card rewards at a discount. If these cards are registered with a CLO company the potential for double commission payment also exists. is an association which has risen to counter this problem by encouraging all participants in the eco-system to work together to prevent duplication. Although on the surface its mission sounds noble, my personal opinion on ruling bodies of all types is one of cynicism. In this case, even though their membership reads like a who's who of behemoth companies in the space (so I may be spanked later for stating my mind), I feel the potential for curtailing small and innovative players entering the market, by the imposition of an agenda, under the premise of "best practice," is not necessarily the best path for CLOs. 


Particularly I do not agree with their Cobra standard, which prioritises an earlier linked offer at a merchant, rather than a more recently linked offer. I feel that this rule specifically will result in the big players winning out more frequently than the newer guys, and instinctively believe it is fairer to prioritise a consumers most recently linked offer. Moreover I feel the publisher which drives or "closes" an impulse purchase is the one who should be rewarded by the merchant, not a publisher in which a user happened to click a ton of offers on randomly a few months prior.


All that asides, publishers such as Quidco and TopCashback have also started to promote their own ability to do Card Linked Offers, some like Quidco using Reward and more recently Birdback in the background, and others like Ebates using Linkables. Others like Topcashback choosing to go it alone.


Effectively the whole space is becoming more and more confused for merchants and consumers alike.As time develops, because of multiple publishers and due to the potential card duplication issue many of these organisations have had to move towards asking users to "activate offers" or "add offers to their cards." This last point, again, removes some of the beauty and seamlessness of CLOs for consumers, and brings them all closer to working within the confines of a Cardlinx type government.


In America Linkables (one of the founders of Cardlinx) has recently launched Omnyverse which is an affiliate network for CLOs. This is the logical direction that the above publisher / data gatherer type of organisations have to move.


Everywhere except America


The ability for non bank led CLO organisations to access transaction information in Europe is very different than in America. First of all we don't use magnetic swipe cards, which makes security tighter, and by extension access to data harder to come by. For this reason no company operating on the PSP or acquirer side of the transaction has achieved the ability to offer their services to all merchants. Whilst they may claim otherwise, European CLO organisations simply don't have the required data to do so. Bureaucracy in the big acquirers has rendered holistic access impossible to date. 


Other than the acquirers, who are all operating to their own agendas, VISA obviously has all the VISA transaction data too. Historically, however, they have claimed they don't own the data and as a result, can't provide it to CLO organisations.  VISA is now launching its own CLO programme, a fact which, in light of the above, if it does not open up the same data to other players, could be considered anti-competitive and a breach of anti-monopoly law, but we digress.


Q: Who owns the transaction data? Merchant, Customer, Bank, Acquirer, PSP, VISA, MasterCard?

A: None of the above. The final answer can only be that "no-one owns it!"


When this conclusion is reached then data will be thought of like water; if you can catch it, you can also use it, and in the end privacy concerns will result in the understanding that consumers alone should determine who may access their transaction data and how it can be used.


Now that VISA Inc is potentially looking to purchase VISA Europe, the American style API access may appear this side of the pond too.  And in any case, the introduction of PSD2 in 2015-2016 will forcibly change and level the CLO playing field.


PSD2 ensures that payment data will be more readily available, allowing CLO organisations to move forward rapidly in Europe. However, it is important to bear in mind that data being legally available and then companies actually being able to integrate and access it are very different things. 


Until very recently VISA had claimed that the card data belonged to their issuing banks, however it seems they may have changed this perspective.


Card-Linked-Loyalty done right


cashbackAPP is not a card scheme, it's not a specific bank and it is not a company which works for them either. It's not an offer API, or a cashback website. It is independent and does not offer exclusivity to any merchant, category of merchants, any payment provider or bank. With its generic name cashbackAPP isn't even fighting to be a brand of its own. It is simply every merchants bespoke card linked loyalty platform and unique customer database.  It is fixing a fragmented and confusing loyalty industry by putting promotions back in each merchant's hands, whilst simplifying the life of their customers


cashbackAPP's strategy is comprehensive, yet it requires deep reflection to understand why?


cashbackAPP offers Card Linked Loyalty (CLL) not Card Linked Offers (CLOs)


Even this simple fact should be reason enough to consider it as the solution for your businesses' promotional marketing needs.


We put each consumer at the centre of his or her on transaction data, for the first time allowing each individual to easily determine which merchants may communicate and incentivise them to spend in their stores, in return for access to their loyalty profile data.  We then allow merchants to communicate directly with their entire "opted in" customer base, whilst allowing each consumer to engage with multiple merchants, and discover new merchants, in a single app.


I hope that this article has provided you with a bit of guidance, but to understand what our solution to all of the above is in more detail, please visit