SOURCE: Vesdia Corporation

Vesdia Corporation

December 27, 2010 09:00 ET

Vesdia Helps Card Issuers Make up for Expected Lost Revenue

Company's Marketing Network Allows Banks to Recapture Revenue Lost Due to Proposed Changes to Interchange Fees; Also Gives Merchants Tools to Increase Customer Base and Loyalty

ATLANTA, GA--(Marketwire - December 27, 2010) - Vesdia Corporation, the leading provider of multi-channel merchant networks and shopping incentive services, responds to last week's Federal Reserve proposal to limit the amount of money that stores and other merchants are charged each time a customer pays for a transaction with a debit card by reminding banks of the value a merchant-funded rewards network brings to the table. A rewards network can help card issuers recapture the expected lost revenue while providing value-added services to their cardholders. In addition, participating merchants realize the benefit of increased consumer loyalty, offsetting card fees.

The Federal Reserve proposed, as recommended by Senator Dick Durbin, reducing debit interchange to $.12 from a weighted average of $.72. This equates to an 83 percent reduction in fees the banks collect. Most banks have planned on a reduction in debit interchange, which will be made final in April 2011, but not one that drastic, and not in a year when most banks are facing a revenue shortfall.

Banks, therefore, will likely be forced to cut back debit card reward programs to make up profits. This will be perceived as a big hit to consumers, especially when more and more Americans are ditching their credit cards for debit. According to the Nilson Report, consumers will execute 67 billion transactions on debit cards and only 30.1 billion on credit cards by 2015.

"The reduction in revenue for banks is bad enough, but banks also will need to communicate bad news to their most loyal customers as they work to restructure their rewards program by adding annual fees or reducing or eliminating base reward funding. However, if the card issuer added a partnership marketing program to its rewards portfolio, they could position the changes as some good news to their cardholders, offering them value-added earning opportunities and discounts at hundreds of retailers increasing the benefits of the card," says Jim Douglass, CEO of Vesdia.

How it works
Vesdia's partnership marketing network taps into the trusted relationship between the banks and its customers, utilizing the banks' frequent touch points to conduct one-to-one marketing, driving cardholders to participating merchants to earn additional rewards when using their debit card. Card issuers gain additional revenue from the increased card acquisition, activation and usage generated by the merchant-funded rewards and additional redemptions. Vesdia's full service multi-channel marketing campaigns and support for customer targeting and segmentation, in partnership with the leading merchant brands, allows banks to drive customer behavior with meaningful offers.

Vesdia's comprehensive marketing services include:

  • Expanded marketing reach through partnership with leading merchant brands to offer accelerated earning opportunities
  • Coupon programs that offer discounts, free shipping, and other benefits
  • Custom, branded earn-side shopping catalogs with strategic partners such as SkyMall
  • Customer targeting and segmentation support
  • Direct email, mail and statement insert campaigns
  • Loyalty program website personalization and offer targeting

If a bank implements a merchant-funded network they can earn an average of 5 percent of the entire signature-based transaction from a participating retailer as a marketing fee (such as $2.50 on a $50 transaction) to make up for the lost interchange revenue.

On the merchant side, Vesdia partnership marketing programs offer the ability to reach valuable consumers in targeted loyalty programs through a pay-for-performance model that delivers measurable results versus traditional advertising activities. Vesdia can segment its database of millions of consumers and target relevant offers toward qualified consumer groups, based on historical shopping behavior, demographic profile, location, or other relevant factors. Merchants who join Vesdia's network can extend pay-for-performance marketing from an online presence to their brick-and-mortar and/or catalog sales channels.

"At Vesdia, we know exactly what it takes to effectively market your loyalty program: the right message, delivered to the right audience, at the right time. Through steady and strategic marketing efforts that increase awareness and participation, both issuers and merchants can effectively reach and motivate their audience to spend more and be loyal," says Douglass.

Vesdia's merchant network key differentiators include:

  • The strongest merchant network in the industry that allows program members to earn meaningful rewards at participating merchants without having to "jump through hoops."
  • Engaging, user-friendly and feature rich online shopping mall that leverages its partnerships with retailers to deliver targeted offers that encourage members to earn additional rewards.
  • Its portfolio of highly visible clients, including: American Airlines, United Airlines, Citizens Bank, SunTrust and Upromise.
  • An in-store merchant network made up of leading brands that consistently reward consumers for their business, including: AMC Theatres, CVS, Golfsmith, Hard Rock Cafe, Jos. A. Bank, Lowe's and Sunglass Hut.

About Vesdia Corporation
Celebrating our 10th anniversary, Vesdia has consistently delivered incremental business to the in-store and online merchants in our network and incremental customer loyalty to the programs we serve. Today, as the single largest provider of partnership marketing and merchant funded rewards, Vesdia supports financial institutions, airlines, affinity groups and retailers enabling customers to earn more meaningful rewards faster. For more information, visit www.vesdia.com.

Contact Information

  • Contact:
    Carrie Crabill
    Trevelino/Keller Communication Group
    Email Contact
    404-214-0722 Ext.102