It's not obvious the world needs another payment method. But a points-based loyalty program tied to the new debit card may give Visit Mexico a tool to steer travelers to suppliers and locations that most need visitors. The idea is intriguing.
Visit Mexico, a tourism marketing agency, said this week it had signed a deal with Rêv, a financial technology company based in Austin. The aim is to coax North American travelers into using a debit-based payment app tied to a loyalty program.
“To promote Mexico better, we need better data,” said Carlos Gonzalez Gonzalez, CEO of Visit Mexico, a public-private agency that represents the world’s third-most visited country. “So we need to partner with fintech [financial technology] and other technology companies to run more effective campaigns.”
“Another question we’re asking is ‘how can we create a loyalty program for travelers?’,” Gonzalez Gonzalez said.
Visit Mexico will try to popularize Rev’s just-announced product, X World Wallet, a multi-currency debit account. Travelers download a mobile app and link it to physical and digital Visa cards via a debit account — or Apple Pay, Google, Pay, and Samsung Pay.
The app gives U.S. visitors to Mexico a way to pay without fussing with local currency. The effort aims to persuade domestic and foreign travelers to make repeat visits. It does this with loyalty-based promotions in a points-based model.
Visit Mexico plans in the next couple of weeks to launch a marketing campaign to promote X World Wallet for Mexicans traveling to the U.S. and within Mexico. The goal is to coax its domestic partners, such as hotel owners and chambers of commerce, to take part.
A Loyalty Program That Encourages Mexican Travel
The app-based payment brand intends to be a loyalty program designed to boost repeat tourism.
The basic loyalty program is generic at first glance. Consumers earn points by everyday spending. They redeem the points for cashback rewards.
The tourism promotion comes in when partners, such as Visit Mexico or a major hotel chain, buy points from Rev and use them to incentivize consumers to make specified travel purchases.
“Our focus is to use the loyalty program to encourage people to travel more frequently in the U.S.-Mexico corridor or within Mexico,” said Roy Sosa, chairman and CEO of Rev.
Customers can use an X Wallet booking portal to book airline, hotel, car rental, and experiences.
But they can also earn extra points for purchasing directly with merchants Rev has identified.
Aiming to Help the Underfunded and Under-Touristed
Using its loyalty program, Rev could decide that customers who pay for, say, a local scuba instructor’s class will earn extra loyalty points as a way of encouraging tourists to shop local.
“I’m the most excited about helping the smaller tourism-based business struggling with generating repeat business,” Roy Sosa said. “We want to reward travelers who patronize those micro-entrepreneurs, and the loyalty program could help.”
“Using an online self-service portal, a hotel chain, etc., could buy points to give,” Sosa said. “Yet the opportunity we’re most excited about is if the Mexican government or a similar organization buys points to support micro-entrepreneurs.”
Sosa said it was easy for Rev to prove the value of program participation to merchants by running tests.
“We could set up the system to say X Wallet users get a discount on a coffee at a Starbucks in the Cancún airport,” Sosa said. “After we run the promotion, we can then go to the owner of the franchise, who didn’t even know the promotion was happening, and show them the data on how much volume we drove and also anonymized insights on the types of customers they received.”
The Visit Mexico experiment with a digital wallet comes as the pandemic prompts tourism marketing to evolve quickly with new priorities.
For example, Maldives recently created a loyalty program to encourage repeat visitors, called Maldives Border Miles, as part of a broader effort to build longer-stay tourism models. Meanwhile, Saudi Arabia is attempting to layer its tourism sector brands to amplify loyalty and repeat visits in a tourism push backed by more than $100 million in funding.
A Debit-Based Alternative to Credit Cards
The Visit Mexico also deal coincides with a broader, emerging trend in the financialization of travel. Industry stakeholders are increasingly encouraging travelers to use next-generation payments, loyalty, insurance, and related products.
The X World Wallet enters a crowded travel loyalty market. A well-established line-up of branded and co-branded credit cards offers travel rewards for spending.
The new product hopes to stand out by being a debit product. Consumers don’t have to apply for credit, and there are no fees to open or maintain an account, which could make it a lower-cost alternative to many credit cards.
“There’s no friction for consumers to sign up because you don’t have to pay a monthly fee, an annual fee, interest, a credit check, or a currency conversion fee,” Sosa said.
Rev has offered cross-border money exchange for more than a decade, processing billions of dollars worth of transactions with services similar to companies like eNett, FIS, Wex, and WorldPay. So it already invested more than $100 million in the tech platform, and it isn’t venture-backed, so it’s not in a race to scale up returns.
“Like any new marketplace, it won’t happen overnight,” Sosa said. “But we have the financial wherewithal to be patient with this as a very narrow-margin business that takes time to scale.”
Rev keeps customer acquisition costs down by relying on partnerships, such as its latest one with Visit Mexico and its earlier ones with SAS (Scandinavia Airlines) and Etihad Airways. That spares it the high cost of brand marketing or customer acquisition through mail solicitation, said Bertrand Sosa, president and chief marketing officer and the CEO’s brother.
Rev’s executives said it would reward travel influencers for spreading the word about the new card by offering rewards through its affiliate program.
Travel suppliers will also have reasons to sign up and take part.
“If you vacation once in, say, Xcaret, a resort and attraction complex in the Yucatan Peninsula, you’re not given any reason to come back,” Sosa said. “Our loyalty program could incentivize repeat visits through promotions while providing critical customer data to the supplier.”
Destination management organizations could use loyalty tools like this to steer visitors to less-touristed areas and toward small-and-medium-sized businesses.
“We hope to make a breakthrough in tourism promotion,” Gonzalez Gonzalez said.
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Photo credit: Visit Mexico, a tourism marketing agency, has signed a deal with Rêv to coax travelers to use a debit-card app and travel loyalty program. Source: Rêv. Rev