Turn “cash outs” into gift cards and rewards

Almost everyone knows that inflation eats away at purchasing power. A dollar today is “worth” several percentage points less in the grocery aisle, at the electronics store and certainly at the pump.

We get less gas in the tank and less chicken on the plate for the same dollar offered at checkout. Getting a few extra dollars of digital wallet value that can be spent on day-to-day activities, or even a splurge, would seem like a tempting offer to most consumers.

David MetzCEO of AdTech Company Pricetold Karen Webster of PYMNTS that adding value – monetary value, i.e. at key engagement points – can turn cash outs and withdrawals into rewards that ultimately increase revenue for merchants, banks and the gig economy and cement loyalty.

The company’s AdTech platform connects business partners with consumers who are typically looking to “cash out” – giving them access to bonus offers through gift cards and other rewards. These branded bonuses are typically worth up to 11% more than a simple cashout.

These gift cards can be redeemed at a number of retailers, ranging from Apple to GameStop, and a host of local merchants. Gift cards are delivered by email.

Beyond that, the company offers bonus offers and allows users to earn Prizeout rewards. In the latter program, users can earn points with each withdrawal. In terms of mechanics, users earn one point for every dollar spent on its marketplace.

Disrupt cash outflows

“We’re disrupting the traditional ‘funding’ process,” Metz told Webster.

This disruption, he said, has positive ripple effects on commercial ecosystems. As we have generally used them, all withdrawals are chargeable. Every time someone withdraws funds from a digital wallet, for example, someone pays a fee – and that fee is paid by the consumer or their chosen place of business.

However, Metz said Prizeout was able to reverse this pattern and have partners monetize these withdrawals, in part by cutting out these middlemen.

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In terms of mechanics, the consumer logs into their online platforms and selects Prizeout as their payment provider at checkout. The company uses advertising technology to show consumers the right brands at the right time.

Metz explained that behind the scenes, when a user clicks on Prizeout, the company’s partners pass a series of metrics including the consumer’s age, gender, location and account balance.

“The person the trader is bidding for is exactly that person,” Metz said.

This avoids the great unknown that occurs when someone walks into a CVS or Walgreens and merchants have no visibility into who is ultimately buying or using those cards, which also reduces gift card fraud.

Prizeout then extends 26 consumer gift card options as those same merchants engage in a real-time auction to bid on their target demographic. A share of the revenue from this additional purchasing power goes to Prizeout merchant partners.

Prizeout stated that 98% of all featured merchants received engagement on the platform. Consumers are quickly embracing this opportunity, earning Prizeout 60% quarter-over-quarter active user growth since 2020.

In total, Prizeout operates across 11 verticals – up from just one vertical just two years ago – spanning thousands of merchants and entities across gaming, government and crypto. The Prizeout partnership base has billions of dollars in transactional volume, with $1 billion in balances posted for branded offers on the platform.

The company “usually sits alongside” traditional payment options, such as ACH, PayPal or even physical checks – where payments are dollar for dollar.

“If a consumer withdraws $100, we allow them to withdraw $111, but it’s for a specific brand, whether it’s Amazon or local gas or a restaurant,” he explained.

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He offered the hypothetical situation where a user could, through the DraftKings app, have $150 in winnings – but by leveraging the Prizeout platform and merchant base within the Prizeout ecosystem, they can collect cards -gifts or other rewards worth up to $163.

The model moves away from traditional conduits, where DraftKings would link to PayPal, PayPal would link to the consumer’s checking account, and ultimately Starbucks would pay Facebook and Google in an effort to reach the consumer and incentivize them to spend money with these merchants.

Metz said that in this way the consumer has the benefit of seeing the payment value increased; the commerce ecosystem participates in the economy of the platform model.

As for adoption, as recently as the company’s Series A in May 2020, the company had sought to capture up to 2% of the withdrawal stream on its base – and that tally now exceeds 12%. This penetration rate has grown as conversion rates are around 30% in early Prizeout interactions, which jumped to 70% in subsequent interactions.

Metz pointed out to Webster that buying behavior differs significantly by vertical.

“If you come to Prizeout from gambling or lottery or even crypto,” he told Webster, the rewards are treated as “found money” that can be used for a treat or to go out. having dinner.

But liabilities are for payroll or gig economy players, and it’s money they use to live on every day and they use for gas and groceries. The typical value of the Prizeout transaction is around $108; for larger payments over $1,000 or more, consumers tend to accept at least some cash payments.

Looking ahead, Prizeout has entered the market with its first banking partner and will seek to expand its presence with traditional financial institutions (FIs), including banks and credit unions. In this case, consumers would allocate money from their accounts (the Prizeout button “lives” on their account page) hosted at banks to purchase products and merchant gift cards – getting around 8% more gasoline or other retail choices in return.

Prizeout, he said, is able to give more buying power to the FI’s consumer base, and the bank makes more money (through revenue sharing) than it does. would do through exchange, debit and credit card spending, increasing the value of the banking app itself. .

The company recently partnered with Square, giving Prizeout access to millions of local businesses. It will be up to those local merchants to create campaigns – and once they do, Metz said, Prizeout will find relevant consumers in the merchant’s local market.

“All we need to do is make sure that when the customer shows up with their digital gift card, it’s accepted at the point of sale,” he said, whether online or at the store.

New round of funding

Prizeout announced on Wednesday March 31 that it has closed a $25 million Series B fundraising round. Investors included Mark Cuban, Precept Capital, Continental Investment Partners, Astralis Capital, Riverpark Ventures and Anchor Capital.

Asked by Webster what the company would do with the funds, Metz said the company would strengthen its business-to-business-to-consumer (B2B2C) offering and strengthen its data analytics. Regional expansion plans will bring Prizeout to the Middle East, beyond its current markets in Canada, USA, UK and Ireland.

“We decided to get to the source of the funds before they hit your checking account,” Metz told Webster. “Wherever you have a stored balance and the ability to direct those funds, we want to be an option.”

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Michael N. Clark