American Express and Foursquare are melding the hipness of social media with the power of plastic.
The companies said Thursday they are taking a pilot program national and teaming up with fashion retailer H&M, sporting equipment chain Sports Authority and New York restaurant owner Union Square Hospitality Group to offer AmEx cardholders discounts through Foursquare.
Cardholders simply link their Foursquare profiles to their credit cards to upload discounts and redeem them through the transaction. Forget needing a coupon or special code, or showing a mobile device to retailers. After syncing your card through this website and checking in, you simply use your card for payment and the rebate shows up on your statement.
"We greatly value technology and innovation at American Express, and we're always trying to find new ways to offer our consumers extra value and convenience," says Luke Gebb, the company's vice president of global network marketing. "We're proud to partner with Foursquare, which is at the forefront of location-based technology and popular with a young, tech-savvy demographic."
And that's exactly who American Express is chasing. The credit card company is trying to shed the image of this-is-your-dad's credit card and has been going after the impressively massive Generation Y. The company rolled out its ZYNC card last year designed to target those young consumers.
Enter Foursquare, which this week said more than 10 million people use its service worldwide. You can bet the age demographic slants younger, too.
Coincidentally, the news comes after China Merchants Bank and Renren, the Facebook doppelganger in China, unveiled a similar program last week. When a credit card holder checks in somewhere through Renren's location function, he or she will receive promotional information from nearby merchants of the bank. The card is expected to debut in July.
Do I smell a trend? Yep.
Visa last year started doing promotions with LivingSocial. It offered Free Deal Days to cardholders if they bought a specific deal with their Visa cards. Financial institutions generally have been feeling out how to leverage social media for the last year and a half, says Nicole Sturgill, research director of delivery channels for TowerGroup.
"At the beginning of last year, they were all watching to see what happens," Sturgill says. "But now you see all these experiments out there with social media like Twitter for customer service and Facebook and YouTube for marketing."
A recent study by Synergistics Research showed that one in four people who has a credit card is a "fan," "friend" or "follower" of a credit card company or brand on a social networking service. One-third said they established the cyber relationship to find out about special promotions or deals, while half said they wanted to learn more about or share experiences with the company or brand.
"Financial companies realized that people are talking about them whether they are engaged in the conversation or not," Sturgill said. "Why not add something positive to the dialogue?"