PIVAS – Payment Information Value Added Services: A platform that lets retailers deliver targeted promotions at the POS, via credit or debit card receipts (lots more here).

A few of my prior blog posts provide some insight into the value of marketing rich payment services, mainly at a macro level. For example, there’s the Deloitte study that shows that merchants will pay 7-9% for a full payment service which delivers sales, versus 2% interchange for payment alone. Also, we know that several promotional marketing tactics frequently used by merchants (direct marketing, in-store advertising, couponing, games, sampling…) represent a combined industry of over $100 billion in the US alone.

Another angle is to look at the cost to an individual merchant of delivering printed promotions, special deals or messages to customers. I’ve pulled a few examples from a Morgan Stanley report. See other examples here, here and here. Costs are generally stated in CPM, or cost per thousand, but I have stated them in costs per individual impression.

Mass distribution methods generally cost advertisers a few cents per impression. This includes newspaper advertisements (2¢ per impression), free standing inserts, i.e. coupons in the Sunday paper (less than 1¢), shared direct mail methods such as coupon books (4¢). But how about targeted communications?

For most retailers, the only way to target distribution is through direct marketing, database rentals and postal mailings. At 90¢ per impression or more, most merchants have to use targeted distribution channels very sparingly, especially in low value sectors like quick service restaurants, supermarkets, convenience stores and petrol stations.

Printing targeted promotions at the bottom of POS receipts is obviously much less expensive. It can help merchants see more value in bank owned payment networks. And it can help attract new revenue streams to banks (as I was writing this piece, I received a report that merchants are paying one of Welcome’s bank customers 5¢ to 30¢ per transaction - plus the normal campaign management and setup fees ranging from thousands of euros per year to tens of thousands … but that’s another story for another blog post).

There is another, similar, POS based distribution method, Catalina Marketing’s checkout coupon service, which I didn’t mention earlier because it is almost exclusively paid by consumer goods manufacturers and limited to supermarkets. Companies like Procter & Gamble pay around 7.5¢ per printed impression, and even more when offering a coupon to buyers of the competitor’s product.