We’re in the age of rewards, of being reimbursed in some way for our attention, our feedback, perhaps most of all our loyalty.
To get a sense of how pervasive it all is, consider that the PYMNTS Disbursement Satisfaction Playbook found that only one-third of consumers and microbusinesses will continue relationships with businesses not offering instant payments.
“There’s an age-old debate — as old as time — about extrinsic incentives and whether they motivate you on an ongoing basis,” Tango Card Chief Commercial Officer Nat Salvione told Karen Webster.
In his own estimation, they certainly do, especially when getting people to perform small actions for small, repeated rewards — micro-actions, you might say, in return for micro-disbursements.
Drilling down a bit, he said that micro-disbursements are payments below the $50 range, and in many cases, they can be below even $25, depending on the use cases.
Within traditional business-to-consumer (B2C) disbursements, rebates have typically been a “significant” use case, he said. You’ve no doubt gotten, at some point, the offer of a prepaid card, perhaps for $100, in return for getting all your gutters cleaned.
Up until recently, with the rise of the platform, it was (and still is) prohibitively expensive for smaller firms to go through the expenses of drawing up the paperwork, printing the cards, mailing them and hoping for returns in the form of additional business.
But in the age of the prepaid digital card, Salvione said, there’s room for micro-disbursements, and even for a bit of experimentation. Rebates and incentives can appear in pretty much any vertical, and we can grab a dime for winning seven bingo games in a row, online, on our phones — deposited to, say, a PayPal account.
Digital Engagement, Frequent Payments
“Think of all the digital engagement with consumers now, when you can do a much more frequent and engaging payment” to keep those devices humming, he said.
Firms also find value in getting consumers to fill out online quantitative surveys — a quick, 10-question hit in which users rate a product or service on a scale of one to five, with instant gratification delivered into their Amazon account or digital wallet. A $2 micro-disbursement can be a valuable, high-frequency reward, he said.
As to the payments themselves, he said that although we may be most familiar with merchant gift cards (such as Amazon), and retailers may be focused on getting funds in real time to a digital wallet, the Tango Card philosophy focuses on consumer choice. Getting a $25 Visa gift card may be exciting for the satisfaction of getting it delivered in an email. But then there’s the problem of breakage (it’s hard to find something to buy with that last $1.10 on the card). Gift cards have brand value, too, but represent a somewhat limited choice.
“There’s some usage limitations there that the direct-to-bank-account or digital payments like PayPal don’t have,” he said.
Salvione was quick to point out that micro-disbursements can be significant incentives to cement one-time behavior, such as getting a vaccine. Companies have a vested interest in making sure their workplaces are safe, especially in customer-facing industries. Those micro-payouts will have major payoff by slowing the spread of disease, he said.
“That’s a perfect example to use an incentive,” he said.
So is an incentive program tied, for example, to driving booking programs for online travel agencies as people return to airlines, cruise ships, trains and destinations unknown.
But the question remains: closed-loop cards or open-loop payments?
Salvione maintained that consumers are smart enough to understand that for a new purchase or a new relationship, a one-time rebate is not a discount of the service; it’s an appreciation for being a customer.
The digital application of these micro-disbursements provides more flexibility for businesses and consumers to put out a variety of these programs — and for consumers to receive them and take advantage of the offers in many different ways, depending upon how they wish to receive the payment.
Most often, consumers want flexibility in how they receive rewards — and the most coveted reward is cash in the digital wallet. But, as Salvione noted, after an action is taken, the choice tends to “flatten” a bit — toward rewards that can be passed along to friends or family in the form of a gift, which is a bit more valuable than, say, lowering a bill.
Amid the pandemic, he told Webster, the company has been seeing growth in the B2C and employer-to-employee and employee-to-employee benefits tied to wellness, for example, or employee rewards and recognition. Flexible merchant applications are useful given how spread out and remote workforces have become. It’s difficult to craft a uniform physical payment program for a company.
Looking ahead, he said, consumers are becoming savvier about what they want — it’s not the traditional prepaid card that expires in four months — and in the digital age, anything that causes friction does more harm than good.
“Having the right rebate delivered in the right way is important,” he told Webster.
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