Dive Brief:

• Electronic POS solutions provider Verifone and financial services processor Fidelity National Information Services (FIS) have partnered to enable credit and debit card holders to use loyalty program points to pay for items at the point of sale.

• The new Verifone Points Redemption merchant application, available for free download from the open, cloud-based Verifone Commerce Platform, connects to the FIS Premium Payback Network through digital payments startup Modo’s COIN Operated Digital Payment Hub to allow third-party loyalty programs to participate.

• Eligible cardholders only need to swipe, dip or tap their card at a participating retailer to pay for their purchases with loyalty points. When a shopper presents a loyalty-linked card payment on a Verifone device, it will prompt them automatically if enough points are available to pay for their items. 

Dive Insight:

Verifone and FIS in their announcement cite research that shows up to $16 billion in loyalty points are left unused or forgotten annually. Part of the issue might be that there are so many ways to earn rewards points nowadays: All manner of brands, including retailers, have begun integrating rewards programs to help consumers earn even more points. It almost feels like we can earn reward points from some company somewhere just by leaving the house.

FIS Premium Payback is a rewards redemption application that is designed to help consumers use more of their rewards points, at least for discounts, but the alignment with Verifone takes that a step further by allowing the card holders to use their rewards points to pay for items in full at an in-store point-of-sale.

That sounds very attractive in theory, but the key to enabling something like this is to make it as simple and quick as possible. If consumers are trying to mentally calculate their available rewards points while in line at checkout before they get to the terminal, it probably isn't going to work. Using an approach that automatically notifies the customer that they have enough points to pay for an item should help. Having a simple yes or no prompt will keep the checkout process moving.

Verifone has been doing some interesting things lately to make new service options available via its point-of-sale devices. Last month, for example, Verifone announced a deal with MasterCard to enable instant financing arrangements at the point of sale. This is another instant point-of-sale capability that shows Verifone has the right idea: Give consumers as much value as possible, but keep that checkout line moving.