Mercator Perspectives

Amex Syncs with Twitter

American Express last week announced a partnership with Twitter that enables the company’s cardholders to purchase products by syncing their card on the American Express website and then tweeting specific hashtags. Amex cardholders have been able to load merchant offers to their accounts via hashtags for almost a year, but the most recent development enables them to actually buy products themselves using Twitter.

For credit card issuers, social media sites such as Twitter could prove to be the ideal platform to deliver targeted merchant-funded offers. Many of the largest banks have deployed merchant-funded offer programs through one of a handful of vendors serving the industry, but cardholder response rates tend to be higher for debit portfolios than credit. This is because debit card users, on average, check their balance several times per month, which creates more opportunities to view offers.

Conversely, when a credit card account is a customer’s only relationship with a bank, she is more likely to log in to the account only once per billing cycle. Merchant-funded offers have enormous revenue potential for credit card issuers, but these banks need to create opportunities to get merchants’ offers in front of their cardholders. This problem is more severe for Amex and Discover, whose primary business is credit issuing, than Visa and MasterCard issuers. Amex’s integration with Twitter could help resolve this issue. Many consumers engage with twitter on a daily or even continuous basis, and the ability to make purchases directly from Twitter removes some friction from offer redemption process.

Visit Mercator Advisory Group's website to learn more about a report focused on merchant-funded rewards.

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