It began where so much business in the United States and worldwide is conducted these days: on a Zoom call.
The seed was planted when Jon Jeffreys, president, and chief executive officer of credit union consulting firm Callahan and Associates, took a call one year ago from a client, who told him to look into what ad-tech company Prizeout has to offer.
“She called me and said, ‘Hey, I had this Zoom meeting, and you need to get involved in this. There’s something here that is going to be really important for credit unions.’ And based on that, I said, ‘Alright, let’s, let’s learn more.'”
Today, Prizeout is partnering with a credit union service organization of nine credit unions from across the United States. The Prizeout Partners CUSO, which Callahan and Associates assembled, gains access to Prizeout’s proprietary ad technology to bring more value to their members and to support local merchants.
More purchasing power for users
“We integrate directly with the mobile provider, directly with the front end and the core, so the only way for a member to access Prizeout is to go on to their online or mobile banking, and we live on their checking page,” said David Metz, the CEO of Prizeout who founded the firm in 2019.
“Right now, over 50% of users that use Prizeout use the entire balance of the digital gift card in the first four hours. So what that really means is that it’s very purpose driven.
“Maybe they’re thinking, ‘I have to go to Home Depot in the next couple hours, I might as well get a digital gift card where I’m getting a bonus,’ ‘I have to fill up my tank of gas,’ or ‘I want to go to Lululemon,’ whatever it might be.
We’re never going to replace all their spending, but the goal is to say, before you make that purchase, it’s probably smart to click on Prizeout because you’re going to get bonus purchasing power that you wouldn’t get anywhere else.”Prizeout CEO David Metz
Part of the appeal of the Prizeout process is the speed at which users get access to their cash: within 30 seconds. Traditionally, such programs that would, for example, issue gift certificates would typically take days but sometimes longer.
‘With us, you’re getting cash now’
The New York-based fintech’s ad tech also allows users to withdraw cash through gift cards with an average bonus of 12 percent. The roster of merchants advertising with Prizeout stands at 1,300-plus and includes the likes of Amazon, Lowes, Dunkin Donuts, and Uber Eats.
“There are a lot of programs, and a lot of the predominant ones are all cash-back. Let’s say you spend $50 at Gap and get cash back, but you get it days, sometimes weeks later. With us, you’re getting cash now,” said Metz. “So if you buy a $100 gift card, now you have (an average of $112). And for a lot of these families, they need the money today, not tomorrow, so that’s a huge differentiator as well.”
For the Prizeout Partners CUSO, helping its members stretch their budgets further through access to Prizeout was a boon.
“The thing that credit unions saw that excited them were really, first and foremost, just with the inflation that’s going on, (the ability to bolster) members’ purchasing power … people are being stretched. Their dollars are going to go further,” said Jeffreys, whose consultancy is headquartered in Washington, D.C. “The second thing is credit unions are going to earn a little bit more money. We had a little bit of incremental revenue, and in a way, that’s sort of member funding. So those are really the two things that made this is a no-brainer and a home run for the credit unions.”
Nine credit unions part of CUSO so far
To date, nine credit unions with a combined membership of 2.77 million have joined the Prizeout Partners CUSO: Suncoast Credit Union, Interra Credit Union, MSU Federal Credit Union, Patelco Credit Union, Stanford Federal Credit Union, Credit Human, Langley Federal Credit Union, University Credit Union, and Collins Community Credit Union.
It could only be the beginning regarding the involvement of credit unions across the US accessing Prizeout’s offerings. There are about 130 million credit union members nationwide, after all.
Other benefits to credit unions from the Prizeout platform include the potential to increase their non-interest income. It can be an attractive offer for local businesses that are not yet credit-union members.
“We’re not done with nine,” said Jeffreys. “I think this can be a solution that will scale very well. And it will have interest, especially as credit unions have case studies and have real, live data. I think it only accelerates.”
For Metz, the more credit unions become involved, the more valuable Prizeout is to merchants seeking to acquire business from potential customers.
“The more credit unions we get, the more members, the more money, the more valuable we become to merchants, the more they’re willing to compete and can potentially raise prices, which will then give bigger bonus purchasing power to the members,” said Metz. “It is in everyone’s interest to build the pie as much as possible. Because you become a force from an ad-tech standpoint.”