Interview: How Raise Mobile Payments Builds On Existing Infrastructure For Seamless Transactions
Raise's CEO speaks to PSFK about how the payment platform evolved from a gift card marketplace into a centralized mobile transaction experience, redefining loyalty programs as a next-gen digital wallet
Raise is a new kind of a payment platform, combining transactions, gift cards and loyalty programs. Originating as a marketplace for the exchange of gift cards, the platform has expanded into a mobile payment system powered by loyalty and incentivized with cash back rewards.
As the company expands, Raise hopes to work with retailers and ultimately become an alternative to the branded credit card, helping drive traffic and conversion online and off, within one convenient digital wallet. PSFK spoke to Raise CEO Jay Klauminzer about his goals for the future of mobile payment and the brands doing the most to encourage shifts in consumer behavior around loyalty and payment.
PSFK: Could you describe your background before becoming the CEO of Raise?
Jay Klauminzer: I've based my career off of building amazing customer experiences, especially in marketplace businesses. I joined Raise from DoorDash, where I ran the revenue side of the business, including all of the merchant relationships with our national partners. Prior to that, I was at Groupon for almost seven years, most recently running the North American mobile business.
I'm always focused on nailing use cases, and on marketplace businesses, not only because they're complex and challenging, but also because I find it fascinating to link retailers with consumers in new and exciting ways.
What are some of the trends you're noticing in the retail and payment space?
There are a few themes that we're seeing. It's not just in retail or payments: It's the greater digital economy.
The first is convenience—that's what's driving consumers to go online. There, customers have things like single‑click checkout. It's easy when they have all of their payment mechanisms already loaded online, and they don't have to take your wallet. Things are going to be simpler every day. That's the first one.
Second is what we've internally called the “Amazonification” of retail. Mainstream retailers and malls across the country are struggling. It's because of these massive shifts online and desire for convenience. What's happening is retailers are working hard to come up with their own products, as well as looking for new ways to talk to consumers as well, both to acquire and drive engagement.
The third is more broadly how to tie loyalty into everyday transactions. You see it with Starbucks: 40% of their customers are now using their mobile app, and it's because it's quick and easy, and they get rewarded for doing it. You see it with more customization of credit card loyalty products as well. Even Apple, with Apple Pay. Especially over the holidays, you saw certain retailers were offering discounts if you used Apple Pay in‑store. It was a way of tapping into that loyal Apple user base.
Those are the three, convenience, Amazonification and loyalty.
How do you see the mobile payment space evolving? It seems that it's par for the course in some areas, like in China or North America, but less so in others.
I think the tipping point is when consumers will feel that they can reliably leave their wallets and purses at home. Even with Apple Pay, which has been very successful, we're still waiting for the terminals to catch up.
I can't reliably use Apple Pay everywhere yet. That's the reason why we like using gift cards as our main technology role: That technology already exists. The technology retailers are built for the last 20 years.
From the consumer point of view, there's some hesitancy and confusion with respect to privacy and also reliability—the “will it work?” concern.
Putting my consumer hat on, “I don't know what will work everywhere” is the biggest pain point. Security is also something we take very seriously. We have industry‑leading fraud solutions. We detect things even before they happen, with instances like account takeovers and stolen credit cards. We take that very seriously because it's table stakes to play in mobile.
Nonetheless, the tipping point for consumers I still think is “Will it be ubiquitous, and can I use it everywhere?”
Could you speak to how you think the increasing synthesis of payments and loyalty will play out?
I think what we're going to see, and this is in years not decades, is the eventual merging of payments and loyalty. Consumers just don't want to carry around tens of store loyalty cards, especially not credit cards. There's just not enough room in their wallet or purse to do so.
With that problem, retailers still need a way to track and reward their most loyal customers. What we're going to see is linking payments and loyalty together. As an example, I was just looking at my Amex bill. If you go on American Express, they have tons of offers with retailers already. They're loaded directly to the credit cards so that the activation happens at that point. That's just the start of it.
Where Raise Pay enters the mix, we can do loyalty in a marketplace that has hundreds of retailers in one app and it's super convenient. We're solving that problem. We're giving retailers a way to reward and activate consumers. We're giving consumers a single place to shop at their favorite retailers.
How would personalization factor into the merging of loyalty and payments?
We should think about it from the consumer versus the merchant lens. From the consumer lens, it's really important. We face this at Raise. We have 4,000 brands consumers can shop at. If we didn't have personalization that could predict what they wanted next, it would be a much more difficult experience than it is.
It will become more important. Amex thrives in that space, however, because they have such a broad, loyal user base. From their perspective and the merchants' perspective, it's working. The merchants just want access to consumers and be able to tailor their offers. Amex fulfills on that promise.
On the consumer side, too, there is work that needs to be done. When you have, in Amex's case, hundreds of thousands of retailers to shop at, all of whom want to talk to those consumers, personalization does matter. We focus a lot on that. As we continue to build out our selection, it's going to become even more important.
What motivated the founding of Raise?
We started as a gift card marketplace. You and I could sell our unwanted or unused gift cards, and make some cash for that. Then consumers could save money in the process.
What that really invented for the industry was self‑use. It was people buying gift cards for themselves. They were no longer gift cards, they were a payment mechanism. When we saw that trend, that's when we realized we should go big on Raise Pay.
It's the next iteration of trying to fulfill that promise, enabling gift cards for consumers' own use. It's a real‑time instant payment mechanism that rewards our customers. It just happens to sit on the gift card technology which, as I mentioned before, retailers already have.
For me, I use my mobile app now everywhere I shop. If there's a deal to be had, I type in the amount I need to spend. Three or four seconds later, I have a payment mechanism for the exact amount. I get between one and 15% cash back for doing that.
You mentioned China. Raise Pay is like Alipay just sitting on top of gift card rails. That's why it's beneficial to consumers who pay money every day. For retailers, they understand the opportunity as we get more entrenched within the marketing departments. It feels like we're an extension of their marketing arm.
We have a healthy user base that shops both online and in‑store. We give retailers a chance to tap into that. It's both to acquire and reactivate their customer. It's been exciting. In fact, some of our biggest brands rely on Raise Pay. They had been hesitant working with us in the past, but now they see a product that sells at full price but rewards people for using it. It just becomes an extension of their marketing team.
On top of that, we're building out more products for them to be able to talk to customers in different ways. My favorite one that we have launched is proximity notifications. When I am out and about, and I get a push notification from a retailer that I am interested in that's just a couple blocks away, and I can save seven or eight percent, I'm much more likely to pop in and try it.
I've bought things at stores that certainly would have not bought at in the past. As our user base gets bigger, mobile penetration is even deeper, there's going to be even more fun ways to engage with this product.
Could you describe how you use purchase data to improve your consumer experience?
When you have thousands of brands on the platform, it's really important to be able to tailor the experience to the types of merchants that our consumers are engaged with. That we do already, and because we also have purchase data, we do know when consumers buy brand A, they also buy brand B. That starts to open up the marketing platform for our retailers.
We could do this in a way that's anonymous to the consumer so we're not sharing their data, but we are able to target based off of what we call “basket preferences.” For our retailers, we're able to say, “If you've got a promotion and you want to look at the audience that has purchased from you and some other brands,” we're able to do that for them.
That's what we've done. Because we have all of the data, we're able to help our retailers to target differently.
Marketplace is stuck with whatever somebody's selling, versus Raise Pay is completely customizable. Those two still exist.
How has been the consumer response been so far since launching?
We've been pleased. We launched Raise in stealth as its own tab late last year. We've seen triple‑digit growth on that product. It's reliable, it's fast and the discounts are pretty healthy. We've been pleased with the performance, which is why we decided to make it a core part of our experience.
What do you think is driving the shift in consumer behavior away from brand credit cards? Is it services like Apple Pay?
I think that Apple Pay is great. For us, it's further validation that mobile wallet tied to rewards is the future.
When I was younger, I signed up for all of my local department store cards. Then I had my gas card, and then it just became a hassle. I don't want to carry around 10 or 15 credit cards in my wallet tied to each of those retailers. I want a single place, a single app, a single mobile wallet that can do all of those things for me.
In the case of Apple, they already had a product for years in partnership with Barclays. It was basically a point for a dollar. You could redeem those for iTunes or Apple Store cards. The experience felt much like any other credit card. The economics didn't make it as rewarding as they wanted for their customers. They want to make Apple Pay truly ubiquitous, tied to reward, and have an amazing customer experience. In many ways, it just further validates that what we're doing is the future.
Finally, what's next for Raise?
Our Q2 involves a complete mobile refresh, which is going to make this experience a core part of our service. We're launching a product that we'll call Instant and that is going to feel very much like Alipay, where we only load the brands that are on Raise Pay. We sort by nearby, as well as let customers search and just type in how much they want to spend. Within a few seconds, it generates a bar code that can be scanned in‑store, and customers can can just walk out.
This is where we're heading, as this experience really fulfills that use case of self‑use and reward.
Lead image: Raise via Facebook