Payments

American Express partners with Verifone to allow credit card users to pay for taxis through reward points

Some of the ways credit card companies lure customers to sign up are through offering competitive interest rates, little or no maintenance fees or through setting up a lucrative rewards program. Through a recent move American Express may have got its formula right of getting customers engaged through its reward to cash scheme.

American Express has partnered with Verifone to introduce a new way to pay that could be easier than paying through your smartphone. As part of the pilot study, American Express has allowed credit card users in the NY City area to pay for their taxi ride through points from its rewards program. In simple words credit card users will use their reward points as cash to pay for their taxi ride in NY City.

The move to tie up with Verifone seems to be an intelligent one considering Verifone process around 20,000 payments a day in NY City taxis. From a scaling perspective, Verifone’s services are used in most of the point of sale terminals. This could help American Express to extend this program in other areas such as retail, restaurants, transit, etc.

Talking about the pilot study, Leslie Berland, American Express’s vice president for digital technology says “There are no phones necessary, no apps, no codes, no registration. This is an absolute seamless integration that does not disrupt the way you currently pay for a cab.” Through this rewards to cash approach American Express claims that their reward program would become more valuable than MasterCard’s or Visa’s.

Here’s how the program works:

  • You take a ride on any of the NYC Taxis.
  • When you have to make a payment, you swipe your American Express credit card.
  • You get an option to pay through credit or reward points.
  • You get to know how many points you have saved and how may you need to redeem to pay for the ride.

American Express claims that users will also see their current reward balance every time it is swiped. The program has been built in such a way that the customer is engaged to use the rewards as cash for payment. This would allow a user to be engaged in building more points and making more transactions through their credit card.

LTP View: American Express also has tie ups with ISIS to facilitate mobile payments. The latest move of American Express doesn’t mean that they would be stepping away from the mobile payments space. This move would help them lure existing customers to use their credit card reward points and get new customers.

Rewards to cash approach may get the attention of other credit card and loyalty program providers.

Chiraag Patel

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading& Blogging with focus on New Innovation, Technology & Startups in the Payments Space.

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