MyPoints, MasterCard Broaden Agreement to Debit Products
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Web loyalty marketer MyPoints.com got another boost in its effort to extend its business offline on Thursday, inking an expanded agreement with MasterCard International.
Under a previous arrangement, San Francisco-based MyPoints.com's members received points for using a co-branded MasterCard credit card.
Now, MyPoints users will be able to transform the points they collect -- from opting into advertisers' e-mails, visiting MyPoints clients' Web sites, and so on -- into a cash equivalent, on a MasterCard debit card. Users go to the MyPoints site to redeem their points for the card, which they receive in the mail, and which can be re-filled using more points.
The five-year deal is a significant win for MyPoints for a number of reasons. For one, it effectively expands MyPoints' offline redemption to all merchants that accept MasterCard -- some 21 million worldwide. Previously, the firm's points only were accepted by retailers and restaurants with which the company had partnered.
Thursday's new arrangement makes MyPoints' currency exchange into real-world money more liquid; under its earlier agreement with the financial services giant, users could redeem their points for a MasterCard-powered gift certificate.
With the agreement good through 2005, it also validates and reinforces MyPoints' model, stipulating that the two partners would jointly create and promote other, unspecified products in the future, in addition to the debit card.
"MasterCard continues to see great value in its alliance with MyPoints.com and we look forward to developing exciting and innovative new solutions that offer consumers more choice and value," said MasterCard's Dan Tuccillo, who is senior vice president for North America deposit access.
A separate stipulation of the new agreement allows MyPoints to promote its online points program to the same audiences to which its pushing the new co-branded debit card.
"We're going to be rolling out certain debit products that we're going to be branding as well, and we're expanding the marketing of the MyPoints card to include offline, as well as to our own member base," said MyPoints.com's vice president of corporate communications, Geoff Ossias. "We're committed to do is building our card list, and ... working to build up our base of cardholders will help us market to people who are not necessarily already MyPoints.com members."
But the most crucially element in the deal is the increased security MyPoints receives from increasing its offline footprint. By expanding both its redemption and marketing to the real world, the firm is better able to buttress itself against continued weakness in the online sector.
An offline presence is becoming increasingly crucial to players in the Web loyalty space -- most of whom are taking a bottom-line beating as online advertising and marketing spending continues to lag. Aside from MyPoints, other players like Netcentives and Coolsavings have adopted similar strategies.
"MyPoints recognizes the enormous potential in our longstanding relationship with MasterCard," said MyPoints chairman and chief executive John Fullmer. "We are delighted to have the opportunity to take this relationship to another level. The ability to leverage MasterCard's strong brand to provide MasterCard debit programs to our members will uniquely benefit all parties including the consumer."