Trefis.com reports that American Express (NYSE:AXP) is planning to expand its deal with young social network FourSquare after the recent conclusion of a successful pilot program. The program offers users access to rewards and local deals by registering credit cards on their FourSquare profiles, which are then automatically credited with discounts from AMEX is they qualify. More on how the program works from Trefis, “The partnership links foursquare profiles with American Express cards, thereby enabling cardmembers to seamlessly redeem deals & discounts offered exclusively to American Express cardmembers by merchants without the need for coupons, special codes or even a show of their mobile devices. Cardmembers make payments at retail price on making the purchase or using the service, and the discount is credited back to their American Express card account in 3-5 days.”
The deal could be a boon to AXPs credit card market share, which currently lags behind competitors Visa (NYSE:V) and Mastercard (NYSE:MA), by helping it break into the sought after youth demographic in leveraging popular social media outlets. Though currently a small network with just 10 million registered users, FourSquare has ballooned at a growth rate of 1000% in the first two years since its release. The partnership with AMEX should help to cement Square’s legitimacy and enhance its popularity among users.
All accounted for, the agreement will probably be more beneficial to FourSquare than American Expresss (NYSE:AXP), as Trefis notes, “In a scenario where 1% of Foursquare members are drawn to American Express cards, this could lead to an additional 50,000 American Express-issued cards in the U.S. in the second half of 2011 – growing to almost 1 million additional cards by 2017,” though even if these figures are optimistic, AXP should gain from the venture in terms of both reputation (in pioneering a deal with social networks) and card revenues (from increased users).