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The world's second-largest payments network has been "looking at the offer and reward space for a while," says chief product officer Tim Murphy.
September 6 -
Bank of America announced the nationwide launch of its online rewards system, BankAmeriDeals.
August 14
Chase Bank, a subsidiary of JPMorgan Chase & Co (JPM), announced late Thursday that it has agreed to acquire Bloomspot Inc., a San Francisco-based startup that presents local merchant offers, such as facial discounts at spas, to users based on their shopping preferences.
The deal will expand the ways in which the largest U.S. bank by assets presents offers to customers. Terms of the purchase, which is expected to close in early 2013, weren't disclosed.
Earlier this morning, Bloomberg News
The purchase points to the expanding trend of card issuers hankering to generate new sources of revenue and to foster more card swipes by tying relevant merchant offers into their products.
Though Chase has run offer programs on certain products in the past, it decided "an acquisition would be a great way to accelerate" within the space, Jeff Kinder, president of Chase Offers, tells BTN. "It's a tremendous value for our customers. …We expect to move pretty quickly and fully integrate [Bloomspot] into Chase."
Kinder says the acquisition marks the bank's biggest unified move into the offers space.
Bloomspot, which first launched in 2010, sells discounts to high-end restaurants, salons, spas, and other luxury-type merchants. In order to send users relevant merchant deals through emails, among other channels, the startup requests a consumer's preference data, such as whether she likes salons and how frequently she wants to receive offers [sometimes, often or never] when she first enrolls in the service.
With the purchase of Bloomspot's technology, Chase can combine its internal data with customer preferences in order to help send relevant deals to them at their preferred frequency, Kinder says. Currently, Chase is hammering out the details of its integration plan.
The bank can use its merchant relationships to expand Bloomspot's existing partnerships. The bank expects its large cardholder base and ownership of a payment processor will help it make its case with merchants.
Altogether, Chase has more than 50 million consumer and four million small business customers.
"We consistently want to add value to merchants and consumers," Kinder says.
In past months, the bank has run a few offer tests that have pointed to people's healthy appetite for receiving targeted merchant deals from a bank, he says.
Members from Bloomspot, which employs about 100 people, are welcome to join Chase. "We look forward to combining the team immediately," says Kinder, touting the technology intelligence of the startup's staff and the firm's merchant analytics on tracking offers as two great assets. "We can leverage them and bring in their expertise."
"This is a great acquisition on Chase's behalf," says Madeline Aufseeser, a senior analyst with Aite Group LLC. "It signals the end of the daily deals business as we know it."
Indeed, she characterizes the early daily deals approach as "shotgun," with consumers failing to receive relevant offers and merchants lacking sufficient data to show how effective their deals were in getting repeat business.
Chase, according to Aufseeser, already has a very extensive rewards program, and the acquisition will add to the ways in which the bank can present offers.
In recent months, a number of financial players have amplified their efforts to deliver customers relevant merchant offers. Indeed, as gatekeepers of transaction data, issuers are able to offer customers targeted deals and want to do so in order to incentivize, and therefore, drive card usage.
In September, MasterCard announced it was
In August, Bank of America Corp.
