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How Frictionless Rewards Will Help Deliver Financial Freedom

By Raphael Kappeler - Reworth
Co-Founder and CEO

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Raphael Kappeler By Raphael Kappeler | Co founder & CEO - Tue, 02/28/2023 - 13:00

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I may be going out on a limb here, but I feel pretty confident in saying that almost everyone would like to receive 10% back on every purchase they make, with no strings attached, deposited directly into their bank account. Of course, as we all know, things are never quite that simple. But what if I told you we now have the capabilities to make them a lot simpler. “Frictionless loyalty” is the new way to reward customers with cashback while using first-party data to develop better products and services, ‌consistently improving your offering and boosting satisfaction. It’s more than a win-win, it’s going to deliver financial freedom to millions of Mexican consumers, and here’s how.

Customer rewards have taken many guises — points schemes, air miles or prizes, to name a few — and while the rewards themselves may have felt like attractive perks, the process of actually claiming them often required more time and effort than they were worth: remembering to use your points card at a specific store, downloading another heavy app, or sifting through too many spam-like emails to find the right information. Rewards should be seamless, barrierless, and instant. They should generate customer loyalty and positive associations with the brand.

Frictionless cashback rewards tick all the above boxes and more. Recent research shows that just 5% cashback increases the probability of purchase by up to 70%, specifically with younger generations (24-42 years old), while 59% of consumers are more likely to choose the same brand over competitors if they’re offered cashback — the essence of frictionless loyalty. On top of this, 79% of consumers are looking for a reward from their preferred companies and brands, only one that breaks down barriers rather than puts them up. And what better reward than money in the bank? Not only with no strings attached, but with the promise of an improved, more personalized experience, better products designed to help those looking to spend less and save more, and financial inclusion for those who have been previously overlooked and disadvantaged.

How does this all apply to Mexican consumers and Mexican companies? Well, although 97% of the Mexican adult population has access to the financial system — if we consider access to physical branches, withdrawing cash from ATMs, using point-of-sale terminals, among others — the unbanked population actually remains very high. Just under half (49.1%) of all Mexican adults have an account in a bank or financial institution, while a staggering 90.1% of the population uses cash for payments of less than MX$500 (US$26) and a further 78.7% continue to use cash for payments of over MX$500.

But the cash economy is selling everyone short. For Mexican businesses, cash cuts them off from learning about their customers’ purchasing habits. Mexican consumers, especially the unbanked, are withholding this information from the very institutions that have the power to develop new financial products aimed at precisely them and others who have been excluded. In a country where 84% of citizens are concerned about their finances, and where the most cost-conscious and cautious consumers make up 68%, cashback reward schemes represent an opportunity to contribute to savings or rewards that suit  the interests of consumers who prioritize their financial well-being. 

We can at last connect the unbanked with the solutions they need by offering more affordable means of payment and presenting a genuine opportunity for Mexicans to improve their lives. Plus, with the relevant data for banks and financial institutions to design new financial products, we can better adapt our services to the needs of more people, driving inclusion, loyalty, and growth.

At REWORTH, we believe our particular solution democratizes financial services because whether you are an AmEx or Bancoppel cardholder, you receive the same cashback percentage and companies get the same frictionless loyalty in return. Our cashback reward loyalty programs can be adopted by stores, companies, and various businesses to offer money as a direct bonus for their customers. This is because we believe the essence of cashback rewards is freedom, freedom to travel or to work from home, and even to change jobs. With the points schemes of old, you couldn't offer this freedom. But with frictionless rewards driving frictionless loyalty, we believe we can help companies deliver the financial freedom Mexican consumers are really looking for.
 

About REWORTH:

REWORTH simplifies how banks and merchants interact with their customers, enabling them to understand and predict consumer behavior, and influence it through the use of cashback. Financial institutions share anonymous transactional data to personalize and deliver merchant-funded offers to increase engagement and revenues. Beyond customer engagement, partners benefit from first-party data marketing and real-time business intelligence. REWORTH’s Insight-Driven Marketing approach is the answer for a personalized customer experience in a new cookieless world for performance marketing. 

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