Based on that data, retailers are offering targeted discounts via the banks through text messages, email and online bank statements.
The banks don't actually hand over your data to retailers. Instead, retailers describe what type of customer they'd like to target and the bank then sends the deal to customers who fit the profile. When the customer cashes in on the deal, the bank gets paid a commission.
In many ways, this is not conceptually different from the good old method of stuffing discount coupons into your credit card bill envelope. But somehow, it still feels much different. One key difference is the frequency at which the banks can now offer deals. Instead of a once-a-month affair, they can provide daily or even hourly offers through e-mail, web, mobile apps, SMS, etc. Another - very low transaction costs: no paper, no envelopes, no people or even machines producing coupons. Finally, and in contrast with Groupon and the like, no user registration is required. That is, by being a credit or debit card customer you are almost automatically enrolled, which means extremely low customer acquisition costs. Overall, should work well as part of a mobile shopping app or a promotional campaign.
== 10x tag relates to an order of magnitude change in frequency and cost of service.
tags: business, innovation, model, information, commerce, advertisement, 10x