Ai Editorial: Combining FFPs & Financial Services Programs for New Earn Opportunities

***STOP PRESS*** ►Registration is open for Mega Event 2015 & 10th FFP Loyatly Conference in San Diego in November.

How are non-traditional partnerships growing the stickiness of a loyalty program? Ritesh Gupta, Airline Information Correspondent assesses the same

The way airlines manage a loyalty program isn’t just about rewarding one with apt loyalty currency or juggling between cash back and travel rewards.  Rather one also needs to take into account what can result in affordability of loyalty partnerships.

Airlines have to assess how loyalty linked to aspirational rewards works, and how they need to look at multi-partner loyalty today.

As highlighted during our annual Mega Event 2014 held in New Orleans in late 2014, frequent flyer and financial services programs are beginning to direct their focus to new earn opportunities not common to their program types but table-stakes in coalition programs. It’s being described as a B2B strategy that focuses on the loyalty program aiding merchant partners to use the power of their program and currency to significantly shift shopping behaviour in consumers.

Reality of coalition

The term coalition, as Tim Moulton, VP, business solutions and business development, Points says, often described as a group of customers that share a bucket of customers to cross-pollinate each other’s customer bases “is not always attractive in emerging FFP and FS (financial services) loyalty programs”.

“These types of brands are generally not willing to share access to their customers,” points out Moulton.

“So, the attractive model is one where each party promotes within their base the program offer setting strict guidelines regarding the sharing of member information and reporting,” he says.

According to him, the value proposition presented to merchant retailers from FFP and in some cases FS is the flight reward option, which is usually a stronger value than third party options. FS, value proposition to the merchant is also travel rewards and experienced base rewards fuelled by the ability to double dip accelerating their ability to get to a reward quicker. FS partnerships also provide an easier relationship to the merchant; no additional step, earn construct understood by the collector and usually no IT or MIS requirements by the Merchant.

“When the FFP and FS work together the real power comes out in reporting that shows relevancy to the merchant and partnership return. In this scenario the FSs’ card products become more relevant and effective to the collector, the FFP enables the members to achieve rewards faster and diversify their accrual revenue and merchants have fewer steps to collect and marketing channels with brands that are respected. For FS and FFP programs that do not want merchants collecting membership information this solves for that,” explains Moulton.

Responding to members’ desire

Airlines need to assess what is fuelling merchant adoption.

The benefits to members include new ways to acquire the points and miles they need to reach their aspirational travel goals faster. The industry is witnessing a lot more exclusive member benefits that truly drive engagement with the loyalty program.

So how are FFPs and financial services programs are combining today to new earn opportunities?

“The main opportunity is the FS opening up more to the FFP. In the past co-brands were reluctant to share spending data from the cards to merchants or even the FFP. There are many examples in the market now (TD/ Aeroplan) where this sharing of spend data has begun, and communicated to the member,” says Moulton. “The data can be used to optimize FS and FFP but also used to show value to merchants. The data begins as a BD tool for the cobrand and FFP to understand the best merchants to pursue and extends into proofing value to the merchant when moving through the qualification and discovery phases of the BD process.” For the FFP and FS this data helps promote utility of the program to the members but for the merchant it helps demonstrate members in their trade area that are not shopping, and designing campaigns to encourage stronger baskets and more frequent trips. Essentially capturing more household spend for all stakeholders, adds Moulton.

Citing examples of exclusive member benefits that some airlines are offering today, Moulton shared:

  • The ability to control your path to a reward through buy, gift or transfer platforms
  • Other earn opportunities with non traditional everyday earn categories (Gas, grocery, pharma, home improvement)
  • Offers in new third party channels such as:
  • Digital wallets
  • Earn and burn of gift cards into FFP currencies
  • Extending redemption options into brick and mortar for real time burn and other constructs
  • Lifestyle partnerships (golf, activity linked special offers such a bike clubs)


So what can one expect in 2015 as FFPs and financial services programs continue to jointly evolve?  

Moulton says one can expect accelerated earn partnerships with merchants. This is currently an under-developed opportunity and program are beginning to develop these teams and partner with third parties to drive the BD process. Also, there would be digital wallet soft launches where FS and FFP’s currencies can be managed and used for some transactions. There is a race in the merging payments sector and the digital wallet provides: the ability to transact with hard currency and the consolidation of content (i.e. loyalty) with the ability to transact with those programs. A consolidator like allows digital wallets to add that benefit efficiently.

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Executive Interview: Duane Tough, Payabillity

Our chat with Duane Tough, President Payability & keynote speaker at the Co-Brand Partnerships Conference held in Chicago on 26 & 27 May 2015.

From A Traveller’s Lens

Aggregation of points/rewards” is the most over-rated concept in the travel sector, believes Duane Tough, President – Payabillity

Nothing like experiencing a product yourself that you are responsible for and then improvising upon the same to enhance its utility.

As an inventor of patents pending in payment acceptance, loyalty, localization and currency management systems, Toronto, Canada-based Duane Tough, President – Payabillity believes there are lots of areas where the overall journey of a traveller can be improved. As for payments, Tough tries to use as many options as possible to come to grips with emerging trends.

Let’s hear out what Tough has to say about the world of payments, loyalty, and his journey as a traveller. Excerpts from interview with Airline Information: 

AI: When you reflect upon your career in the world of payments, what would you term as the defining moment?

I can’t say ‘one’ moment was defining – I think that the whole payments lifecycle of ‘never being boring’ and always being able to learn more is the motivator for me. I try and use as many as payment methods as possible. It really depends on the jurisdiction – cash, open network cards, closed network cards… I was in Las Vegas recently and purposely spent the whole day paying for everything with casino chips!

In Canada they have several wireless and NFC networks that compete for a relatively small market- Interac (a national debit network) Visa, MC, and all pale to what Starbucks does on its network in Canada - adding more seems overkill to the consumer in markets like Canada.

AI: As a traveller, what excites you most about completing a transaction in air travel today?

Many air travel payment items excite me, the progress of onboard payments, the pre-pay and ‘layaway’ plans for ticket purchasing, corporate travel management, flight expense reporting along with personal and corporate reward reconciliations into reporting.

AI: What would you like to see improving as far as operations of the airlines in general is concerned?

Airlines are very good at communicating what ‘they do’ to the traveller, if they enhanced the offerings of communication to ‘time to pass through security’, ‘real time taxi waits’ and more along the lines of what the ‘person’ does in the whole lifecycle of their travel- not just what the person does with the airline – it would be better.

AI: Technology and devices have a lot to offer to travellers, and accordingly delight them. How easy or challenging is it for even a tech-savvy traveller to embrace new forms of payments?

I think the tech involved with airlines is greatly assisted by the “fintech” industry as a whole educating the consumers that in turn understand more of what the airlines offer in technology and payments.

AI: How should airlines gear up for payments strategy today in an omni-channel payment environment?  

Anything you can buy online, over the phone or at the counter you should be able to do anywhere with any device with multiple payment methods, I should not be told at the boarding gate that they can’t take my cash to upgrade or that points (as a currency now) need to be done online – I have been rejected many times in different ways with almost every airline.

AI: Can you cite examples of some of your inspiration/ experiences as a traveller and how you incorporated the same in your work?

Staff - I have seen the staff of many airlines go above and beyond in making the experience much more enjoyable. As a mostly business traveller I dread a lot of flights- when I hear the humour or the attention of that one staff member before during or after a flight I forget about the dread and enjoy more of the experience.

AI: What according to you is the over-rated concept/ theme in the travel sector?

Aggregation of points/ rewards – no one understands code share points and redemption transfers and expiries- all those offers are just confusing to most people and end up being a ‘whatever’ moment that does not contribute to the decision of where, when and who to travel with.

AI: What according to you is the next big thing in payments as well as air travel?

These would be:

  • Open source flight integrations for past, present and future flights (wish lists, reminders, reward levels to next free flight) on a technology basis so that many sites can contribute to the overall airline experience. Imagine logging into your bank account, your cell phone or cable account and getting all the travel management data and tools so that you know if you use your rewards credit cards for xxx more dollars you can take your kids to Disneyland with a free flight or hotel etc.
  • In-flight and terminal real time translation – its close with some smart phone apps, but with NFC- how about when I approach a sign my phone has it in English (or whatever native language) for me – I can ‘tune’ my phone/ tablet etc to hear the in-flight messages in any language or in txt for the hearing impaired or even brail.
  • Anywhere billing- bill my flight to any account – cash, debit, credit, cable, phone bill and more.



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Co-brand cards: which are most rewarding?

In American Airlines' latest financial update the carrier disclosed that 66% of its total frequent Flier miles were sold to partners, such as the bank issuing its co-branded credit card. That's a whopping 125 billion miles! This demonstrates the power of co-brand and the importance airlines' place on this revenue source. However, at least in North America (because the trend hasn’t totally caught on everywhere), the banks have responded to the lure of travel as an incentive; the banks have established their own travel reward cards.

So, which cards are most rewarding?  Are consumers better off with an airline co-brand card or a bank travel reward offer?  My recent research “Card Carrying Generosity” came up with some intriguing surprises. I’ll be sharing the results of this research as part of my talk at the FFP Spring Event in Washington DC in April. Quantifying value in the loyalty business is never an easy task, but the report indicates banks have gained an advantage. The lesson I will offer during my presentation is this - - airlines be aware, because your competition is wide awake.

I’m also delighted to be able to share that Airline Information has made the Kids First Fund their supported charity for 2013.  The fund works to help abused children in resource-poor areas of the world. Kids First Fund is supported by generous donations from airlines, hotel and car rental companies which provide prizes for our charity auction. If you’d like to know more about the charity, or to make a donation for the charity auction, please click:

In the meantime, if you want to know more about the "Card Carrying Generosity" report you can visit:  Click on the recent report link.  I’ll also be at the FFP Spring and the Freddies Award Ceremony if you want to come and know more about this research or the charity.

Guest Editorial by:
Jay Sorensen
, President, IdeaWorksCompany

Guest Editorial: Dual Co-Brands, Driving Loyalty Revenues

Guest editorial from The Mallett Group

Is your loyalty program leaving revenue on the table? Over the past few years Dual (Jewel/UK lingo) card offerings have begun to be reluctantly embraced by the merchant networks to address acceptance issues. For those of us who have not encountered dual card offerings, they are co-branded credit card products that offer not one, but two network branded cards tied to a single consumer account. Meaning there may be a Diners Club card paired with a MasterCard that is placed into market within a merchant's co-brand card offering.

Because the dual network offering allows the issuer to garner all spend due to acceptance restrictions in certain markets. For example, American Express has more limited merchant acceptance in the UK market, so a companion Visa is offered to capture spend that otherwise would be relegated to other card products in wallet. Meaning it is better to have partial share than no share at all. Counter intuitive upon first blush, but potentially sound as one never wants to be late to the party.

We have seen these offerings in the UK – with the likes of Virgin Atlantic, as well as with airlines in Spain and India. And, watch this space as there are more to come!


  • Ego: When was the last time die hard competitors played together and were happy?
  • Commercial:  Complex negotiations to produce a consumer value proposition (CVP) that is acceptable to both networks
  • ROI: Projections of spend that relate to back-end compensation to the network, issuer and ultimately the brand sponsor
  • Marketing: Messaging correctly to acquire and retain.  Customer confusion can be a concern
  • Earn:  Internal network requirements place restrictions on enhanced and devalued mileage/point earn ratios
  • Benefits:  What card benefits get attached to what network offering
  • Negotiations:  How to please some of the people some of the time
  • Contracts:  How agreements are structured and how the money flows including VAT in some markets

The Dual Card offering can be a powerful measure to employ in a less than ideal market situation. However, one needs to navigate the obstacles in a sophisticated manner.  It takes more than the average plug and play solution, but in the end it can provide a robust product to consumers and reward the brand with enhanced commercials.

To learn more about loyalty co-brands and dual cards in particular, please contact Marc Berman, President, The Mallett Group by emailing him at Marc will also be chairing the Co-Brand 2015 Conference in Chicago on 27 & 28 May 2015 and the Travel Co-Brand Partnerships Conference at Mega Event in San Diego on 4 & 5 November 2015 in San Diego

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Innovation & Travel Co-branded cards

Co-branded credit cards are rapidly evolving.  Pressure from regulators on “interchange” fees is putting pressure on the credit card networks to reduce the fees they charge, which is beneficial for merchants, but not for those trying to offer large rewards for airline & travel co-branded cards. British Airways recently offered 100,000 Avios Points to consumers for opening its U.S. card, where interchange fees are higher, but the richest we have seen in the UK market place is 35,000 points, as interchange fees are generally lower in Europe. 

There is also pressure on co-branded cards from cash-strapped consumers who are turning increasingly to pre-paid cards.  Growth in pre-paids is also being driven by innovation, an example of which is the One Smart Card from Air New Zealand. The Kiwi airline put 1 million prepaid cards in to the hands of customers as a joint pre-paid/Frequent Flyer card that allows consumers to load money in various currencies onto their Frequent Flyer card, reducing or eliminating the foreign exchange fees charged by many cards to consumers when they make purchases abroad.  

These developments and many others will be discussed at the Co-brand Partnerships EMEA Conference in London on 23/24th of October 2012.

The Co-Brand Partnerships EMEA Conference is the event to find out what is happening in the airline & travel co-branded credit card space in Europe, Middle East and Africa.  As good information and up-to-date market insight is essential for innovation and decision-making, we are delighted that The Nilson Report is our media partner for this event.  The Nilson Report is the essential place to go for a comprehensive view of everything in the co-brand and consumer payments market with statistics not available elsewhere. 

Please visit the Nilson Report website to receive a sample of the service and see for yourself.  I am sure you’ll agree it is an excellent resource.

We look forward to seeing you in London next week.

Michael Smith, Managing Partner, Airline Information

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