ZAP has also pivoted from an open platform where brands shared points with each other, to a closed system where points can only be used in the brand where they are earned from

The ZAP founding team

Philippines-based rewards and loyalty programme startup ZAP has raised US$550,000 in a new funding round from investors including Venture Capital Holdings and Kickstart ventures.

This adds to the startup’s recently raised US$850,000 funding. With the latest round, ZAP’s total investment raised to date has touched US$ 1.4 million.

The money will be used to grow the startup’s sales and product team, and to make a push into the payments space.

“We’ve always seen loyalty as just the first step towards a larger goal – payments. We believe that payments alone will not drive consumer adoption and that loyalty + payments presents a stronger overall value proposition to merchants and consumers alike. The year 2018 will be an interesting year for payments. Alibaba has entered the Philippines through an investment in Globe Telecom-owned Mynt. Grab has launched Grab Pay, and there are a slew of other mobile wallets competing for attention. It is going to be an interesting 2018. Watch out for developments from ZAP in 2018 on this front,” ZAP Co-founder and CEO Dustin C. Cheng said.

Also Read: Own up to your mistakes: Grab Philippines Country Manager on dealing with crisis

ZAP has announced that it has changed its business model from an open platform where brands shared points with each other, to a closed system where points can only be used in the brand where they are earned from.

ZAP provides a white-label customised loyalty programme where brands can see valuable customer data such as age, birthday, gender, city, name, email and spending patterns. ZAP then uses this data to automatically reach out to all non-returning customers with personalised SMS messages after a set period of time. All merchants need is an Android tablet and an internet connection to get started.

With over 800,000 users, ZAP claims to have helped over 800 businesses across the Philippines to launch their own branded loyalty programme.

Instead of requiring customers to download an app, merchants simply ask customers to enter their mobile number on the merchant branded tablet to earn points. For example, if a customer spent 200 Pesos at Chatime and got 20 Chatime Points (10 per cent cashback), the customer can then use the points as cash (1 point = 1 peso) for future purchases from any Chatime outlet.

According to Cheng, ZAP’s white-label, mobile number-based approach is what separates it from the other companies working in the loyalty space.

[Infographics] E-commerce in the Philippines is a healthy mix between local and global

“At the start, we were thinking of the end user first. As an end user, you’d want your points to be redeemable across thousands of places. However, the end user was not our client, the merchant was. At the end of the day, the merchant did not want to promote a third-party programme that was not their own and did not see a coalition programme as something that provided them with loyalty. Customers ended up redeeming the points at a different merchant. It was more loyalty towards the coalition rather than to their brand in particular,” Cheng explained.

“We listened to the customers who were actually paying (merchants) and gave them a branded programme they could call their own. They get all the data and since it’s theirs, they push it more. We get paid monthly or upfront (more than half of customers pay upfront) and get better revenues,” added Cheng.

The post Philippine loyalty programme startup ZAP raises US$550K from Venture Capital Holdings, Kickstart Ventures appeared first on e27.