SKUx Prepaid Cards for Item-Level Promotions
Consumer packaged goods (CPG), which are products consumed daily and replenished frequently, is a market fueled by more than $200 billion in annual promotional spending. Paper checks, coupons and vouchers delivered directly to consumers and used for rebates comprise nearly 40% of the CPG industry’s promotional efforts.
Each of those delivery mechanisms is prone to fraud, while providing CPG brands and marketers little insight into the efficacy of their promotional campaigns.
Fraud typically occurs by way of counterfeit coupons created using Photoshop software or paper checks stolen before delivery to a recipient. Coupons are often unserialized, and most that are redeemed at a point of purchase are subsequently sent to a third party where they are hand counted or weighed. It can take weeks or months before the CPG company gets a chance to measure results and for the retailer to be paid.
SKUx has developed a platform for delivering offers from CPG providers and retailers directly to the digital devices of consumers. This delivery method provides trackable and traceable data throughout the life cycle of the offer from its creation, distribution to the consumer and redemption.
Consumers can access promotions handled by SKUx within 30 seconds whether delivered in-store or online, including via QR codes that can be placed in large venues such as stadiums where they can even be displayed on a massive screen.
The SKUx digital payment platform can facilitate offers delivered to credit, debit and prepaid general purpose and private label cards. Those cards are created with the exact monetary value specified by the SKUx client, with dynamic spending controls that allow the cards to only be used at a particular retail location, perhaps only during a defined timeframe. Utilizing the company’s SKUPay technology, cards can only be redeemed for a specific product (item level).
SKUx’s platform sits between its CPG or large merchant customer and a prepaid card program manager, such as its partner Highnote, which issues multiple brands of payment cards through Sutton Bank. The company’s APIs integrate with the merchant and the issuer.
SKUx will work with Visa to build new sources of transactions for VisaNet. Visa will offer opportunities to its clients including banks, retailers, travel and hospitality sector merchants and businesses in sports and entertainment to handle their promotions with virtual cards rather than a paper check, coupon or voucher.
Beyond the promotions industry, SKUx item-level eligibility opportunities include the rapidly expanding $200-billion annual healthcare restricted spend market involving governments, employers and health insurance company efforts to promote healthy food purchases. Through its item-level eligibility purchasing filters, SKUx can include or exclude specific products, such as excluding sales of alcohol or tobacco.
SKUx uses Hedera’s distributed ledger blockchain technology to track the issuance and redemption of item-level payments. This inhibits fraud and provides a third-party audit trail for government and healthcare providers that may require it.
Most of SKUx’s promotional campaigns have been with enterprise-sized companies, such as Mondelēz, Inspire Brands and global marketing agencies. SKUx also works with small and midsized businesses and expects to broaden access to those merchants through partnerships with networks, acquirers, gateways and other third parties.
The company holds 2 patents connected to item-level payments, and another 17 are pending. Access to the SKUx platform is via tier-based subscriptions. It charges both setup and licensing fees.
SKUx has raised $25 million in funding since 2018, including a $12.5-million Series A round. It plans to expand outside the US over the next year.
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