Why Shopkick Partnered with MasterCard and Visa to Reward Purchases

Shopkick, a popular mobile application designed to reward users for their in-store purchases, has recently partnered with MasterCard and Visa. This decision may seem surprising considering that Shopkick could potentially work directly with hundreds or even thousands of individual retailers. However, partnering with financial networks like MasterCard and Visa offers significant advantages that make this collaboration a strategic and necessary move for Shopkick.

Data Integration and Enhanced User Engagement

As Peter mentioned, Shopkick doesn't have to partner with these networks, but they do it because it enhances their ability to gather and leverage data. By integrating with MasterCard and Visa, Shopkick can collect more comprehensive information about user behaviors and transaction patterns. This data integration allows for more personalized rewards and better user engagement, which are crucial for the success of any loyalty program.

MasterCard and Visa serve as intermediaries in the vast majority of transactions, making them ideal partners for Shopkick. These financial networks have the infrastructure in place to monitor and track transactions. Integrating with them means that Shopkick can be alerted to qualifying purchases in real-time, ensuring that users receive rewards promptly and accurately. This level of real-time monitoring and engagement is difficult for Shopkick to achieve by working directly with individual retailers, especially smaller or local ones.

Technical Simplification and Reliability

Partnering with MasterCard and Visa also simplifies the technical challenges associated with processing transactions and providing rewards. Most retailers lack the technical infrastructure to track the specific card numbers (PANs) associated with their customers. Even if Shopkick could build such a system, the retailers would still need to ensure that they can send transaction data to Shopkick efficiently. This setup is complex, time-consuming, and error-prone.

In contrast, MasterCard and Visa have the robust systems and networks in place to monitor transactions and alert Shopkick when qualifying purchases occur. This means that the transaction data can flow seamlessly from the financial network to Shopkick, eliminating the need for complex integrations with individual retailers. The simplicity and reliability of working with established financial networks make this partnership a practical solution for Shopkick.

Alternative Options: Connecting to Processors

While integrating directly with retailers or payment processors is an alternative option, it comes with its own set of challenges. It's easier and more reliable to work with established networks like MasterCard and Visa because these networks already handle a significant portion of the transactions and have the necessary infrastructure in place.

Connecting to payment processors could work, but it would require integrating with a large number of long-tail processors. This would be more complex, time-consuming, and could introduce reliability issues. By focusing on a smaller number of mainstream financial networks, Shopkick can achieve broader and more reliable access to transaction data without the added complexity of working with many individual retailers or processors.

Conclusion

Shopkick's decision to partner with MasterCard and Visa was a strategic choice that offers significant benefits for both Shopkick and its users. The partners provide the necessary infrastructure and expertise to streamline data collection, reliable transaction monitoring, and seamless integration of rewards. This partnership enhances user engagement and ensures that Shopkick can maintain its position as a leading mobile rewards platform.