Starling Bank cardholders accrue loyalty rewards with Yoyo just by using their card; other banks’ customers must instead use the Yoyo app at the point of sale
Customers collect loyalty rewards and make purchases seamlessly through the Yoyo app, by presenting their dynamic QR code to merchants for scanning
In Australia, Stocard is an app that combines loyalty programs, intends to expand into payments in future
Point of View
Yoyo is a mobile payments and loyalty platform in the UK. Customers can use the Yoyo app to seamlessly pay and collect loyalty rewards using dynamic QR codes generated in-app. Customers no longer need to carry multiple physical loyalty cards, including ‘coffee cards’.
Starling Bank cardholders, however, can skip the Yoyo app and pay as per usual with their Starling card, while their loyalty rewards accrue with Yoyo automatically using Starling’s API.
With the exception of Starling customers, Yoyo users fund purchases by linking their payment card to the Yoyo app. Payments are directly processed, rather than prefunded, from users’ cards by Stripe, as card-not-present transactions.
QR codes are used extensively for mobile payments in emerging countries, particularly in China and India. But in developed countries, mobile payments are typically NFC. Therefore, it is interesting to see Yoyo take off in the UK, particularly as a third of card purchases are now contactless.
The partnership between Starling and Yoyo gives a glimpse of what is possible with the forthcoming UK open-banking framework. The framework is due for delivery in January 2018.
Loyalty programs are popular with Australians, with nearly 90 per cent of consumers enrolled in at least one program, not to mention the prevalence of ‘coffee cards’. But each program requires a separate physical card. Stocard combines loyalty programs in a single app, and currently has 1.5 million Australian customers. At this stage Stocard does not provide for payments, but it plans to launch mobile payments capability in future.
Given the partnership between Starling and Yoyo, could an open-banking framework here provide future opportunities for Stocard to integrate payments with loyalty in Australia?