Yesterday, Online Media Daily dropped the news that USAA has been quietly testing a platform that lets the financial institution, which supports former and active military personnel and their families, target and retarget advertisements based on debit card purchases. The service offered by Cardlytics supports data from both online and offline purchases.

So what is it?  Well in a nut shell, it is behavioral targeting based on your actual debit card purchases. Though it may sound scary at first, it seems to benefit the consumer with local advertisers and major chains having the opportunity to provide incentives that in the form of loyalty programs or encourage repeat purchase (i.e. you used this dry cleaners, come in for 10% off next time). Unlike most behavorial networks, the ads are not served to you via a network of other sites, instead they show up in your online bank statement.

Online Media Daily goes on to say, “Cardlytics and USAA began testing the platform with an unspecified number of bank customers in early August, with plans to test the system through mid-September. Both companies decided to make the project public after experiencing much higher response rates than what you would see with typical banners and standard programs online.”

“The average U.S. consumer uses their debit card for 70% of transactions, which has prompted financial institutions and banks to adopt — or look more closely at — behavioral targeting platforms,” Hans Theisen, Cardlytics’ chief revenue officer and co-founder. “About 15% of consumers use a credit card for their primary form of payment.”

Consumers will need to opt-out, rather than opt-in, because the service works as part of the bank’s purchase rewards program. With regards to security, USAA stated that all customer information remains private. Cardlytics will only receive aggregate transaction data to match offers from merchants.

Cardlytics expected to have about 10 banks on board by the first quarter of 2010.

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