Every vendor wants to be the go-to choice in their respective category. Whether you run a chain of poke bars, drug stores, bookshops or ice cream parlours, you want to be the first place consumers think of—it not only boosts your bottom line but boosts your valuable bank of customer data. So for years, businesses have made all kinds of value-add plays to secure the loyalty of their customers—buy-10-get-one-free offers, points cards, perks cards, discount cards, birthday gifts, or instant rewards.
These have seen some success, but there are obstacles for the consumer that keep these programs from truly gaining momentum: they forget to bring their card or forget that they even have one; they lose the card; they don’t know how to redeem points or what the points get them.
The mobile wallet simplified this by putting everything in one place, but still, it was still an extra step, selecting the card to gather points, and then figuring out how to redeem them—there was a link missing.
Consider this: If I buy an Air Canada flight using my Star Alliance-linked credit card, shouldn’t my flight points load directly to my Aeroplan card from the moment of purchase? Or, if I earn a free smoothie on my tenth purchase, should I need a piece of paper to then redeem my reward? Typically by the time I accumulate ten purchases I’ve lost the card or removed it from my overstuffed wallet.
Smart tokenization is set to change that by integrating value-added-services (VAS) right into the transaction.
Where standard tokenization revolutionized the security of mobile payments by adding a layer of abstraction to stand in for the payment, smart tokenization is introducing whole new categories of transaction altogether. Smart tokens need not only be exchanged for a dollar amount. They can be translated into any sort of value—a voucher for a cup of coffee, a discount on a hand blender, loyalty points, airline miles—all using vendors’ existing acceptance infrastructure and integrated into the current payment flow.
When you remove the assumption that a token must stand in for a credit card number, the possibilities for VAS are limitless. And when you create truly relevant, easy-to-use loyalty programs, customers respond. It allows merchants to harvest more data to make better decisions about products, services, marketing and growth, and builds lasting customer relationships. Consumers spend more time, more money and more mindshare engaging with your business, and they actually get to claim the perks that come with it.