Anu Shukla, Founder and CEO, RewardsPay

RewardsPay is a consumer payment service that enables consumers to use credit card rewards points, cash rewards, hotel points or frequent flyer miles to pay for goods and services at merchant websites or in stores. We spoke with Founder and CEO, Anu Shukla, about her company.

Shukla is a serial entrepreneur with RewardsPay being her fourth venture. She has also held a variety of executive roles in marketing and product management. She was named to the Computer Industry “Dream Team” by Business 2.0 magazine in 2004, awarded an honorary doctorate and the YSU Distinguished Alumni award in 2005 and the Entrepreneur of the Year by the Washington D.C. based Dialogue on Diversity organization in 2005.

Anu Shukla
Anu Shukla

InsideFlyer
How did the idea of RewardsPay come to pass?
Anu Shukla
My last two companies were dealing with personalization for e-commerce sites and virtual currency monetization for social and mobile games. I was immersed in these two areas and happened to be buying event tickets online where I was offered the option of paying for my purchase with my credit card reward points. As a consumer, I perceived this as a great utility and of course paid with my points. I started to investigate and found that there were $50 billion in points, miles and cash rewards that were given out every year, and about a third went unredeemed. Reward programs built up huge liabilities and low redemption rates lead to lack of engagement and loyalty. So, I thought a platform that enabled the redemption of rewards at merchant sites and stores would be beneficial to all the stakeholders and popular with consumers. Hence, RewardsPay was created.

InsideFlyer
Can you explain how the purchase process through RewardsPay works?
Shukla
RewardsPay is present as a payment option at a variety of online sites. Customers select it as a payment method at checkout just as they would select a credit card or PayPal payment option. They can then select any of their reward programs that we work with and pay with points for their purchase. It is a few clicks and even less if they have used the service before and stored their reward program credentials. They can view their reward program balances in one place and select the program they want to use and they can choose to split tender—pay some portion with points or miles and the balance on a credit card. Later this year, consumers will be able to pay with their miles in physical stores using a mobile app.

InsideFlyer
What are some of the trends you’re seeing in regards to using points/miles for things other than free flights/hotel stays?
Shukla
Non-air and non-travel related redemptions are still a relatively small but rapidly growing redemption option that customers seem to love. In an independent survey, 89 percent of consumers preferred to redeem their rewards at merchant sites vs. any other redemption option. The two big trends we are seeing are online shopping where customers have the flexibility and convenience to buy whatever they want and pay with miles; this is far more convenient than the restrictive choices at the typical burn mall. Secondly, we are seeing an exponential increase in the the use of mobile devices and apps to redeem miles, send gifts and look up reward balances.

InsideFlyer
Many frequent flyers say that using miles for international award flights offer the best value per mile. Why would a frequent flyer choose to use their miles for something other than an international award flight?
Shukla
Frequent flyers should always use their miles for the best value possible! But having more options for redemptions is also good for frequent flyer program members. What if you could buy an international ticket for $600 and earn miles, while spending 50,000 miles you had for $2,500 of shopping? That would be a better value. Other reasons may be expiring miles, blackout dates, no international travel planned, not enough miles, etc. I think it is up to the individual flyer to make that choice. But, having a choice is desirable.

InsideFlyer
What are some of the benefits for loyalty programs to use the services of RewardsPay?
Shukla
RewardsPay was designed to keep the needs of loyalty programs front and center. The user flow is branded with the loyalty program and they are engaging with the program directly. Increased engagement leads to increased loyalty. The burn rate is determined by the program and partially merchant funded, the spend can be directed by the program by choosing the merchant and the eligibility for participation as well as the exchange rate. Currently, programs are burning liability at a discount compared to other redemption options. There is good brand association for the loyalty program by being visible at merchant sites outside the four walls of a destination website. For programs that offer redemption or burn malls, in other words, non-air and non-travel related redemptions, this is a no-cost addition that greatly increases the choice and flexibility for their members. Programs that are newly venturing into offering non-air redemptions, can avoid all the costs of building and maintaining a destination website and the associated warehousing, fulfillment and shipping costs, which are significant. Simply put, RewardsPay offers a no-cost redemption channel loved by members!

InsideFlyer
RewardsPay partners with United MileagePlus, SAS EuroBonus and Choice Privileges. Are there other travel loyalty programs coming online with RewardsPay soon? Any you can mention? Or can you give us a hint (ie: airline, hotel, car rental company, etc.)?
Shukla
We currently work with Discover Cards in addition to the programs mentioned and RewardsPay will roll out another hotel rewards program in a month, and three airline programs in Q3/early Q4 this year.

InsideFlyer
Can you tell us about how RewardsPay works with amazon.com?
Shukla
We have integrated into the Amazon.com e-gift code platform and have an agreement with them to enable redemption of miles into Amazon e-codes, that can be used to instantly pay for shopping on Amazon.com.

InsideFlyer
What do you see in the future for Rewards Pay?
Shukla
Our goal is to be a global service that provides the greatest value to consumers, merchants and loyalty programs. Consumers get increased liquidity and increased options to spend their rewards when and how they want, merchants get new users and incremental revenue and loyalty programs get more loyal and engaged members, while optimizing burn and reducing liability.

InsideFlyer
How have consumers responded to using their miles/points to pay for items online?
Shukla
Every metric we can see indicates that if the consumer is made aware of this option, they will use it. And those that use it, use it repeatedly. We have consumers that redeem every month for the $50 of iTunes, for example. Also, for international programs, it has been a great way to increase engagement with members in other geographies where they may not have had as many options as their base. So, if you have some members in the U.S., they may not have all the options available to them that your European members have. This is a low-cost, low-maintenance way to increase their redemption options—and we have seen that those consumers take advantage of that.

InsideFlyer
For our final question, we are asking everyone we interview—please tell us about one particularly memorable trip you took.
Shukla
Recently, I went to Cancun with my family—my first time. We went to Chichen Itza, the Mayan Pyramids and zip-lined for miles over the rainforest, swam in underground rivers, snorkeled, sailed to nearby islands and stayed in a resort with the whitest, softest sandy beaches and the warmest ocean I have ever been in! I am amazed that this heavenly place is so close and yet I had never been there before. To top it off, we spent an entire day swimming with dolphins and feeding lettuce to Manatees. My kids have had the best vacation of their lives, and I have to say it was one of the most amazing experiences for me!

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