On the heels of the Iowa City Downtown District launching a new gift card program, the Blend Card has launched at 11 local businesses to help streamline rewards programs.

Paul Kongshaug founded the local Blend Card company in May but formulated the idea a few years ago when he was working at a start-up advertising company in Arizona.

“I was thinking — what makes interaction between businesses and customers valuable?” Kongshaug said. “By then, Groupon and Daily Deals started to emerge in the market. It’s the idea of customers using the card every time they come in, so there’s more of a permanent connection.”

While the Downtown District gift-card program allows customers to use the cards at any participating businesses in the traditional gift-card sense, the Blend Card acts more as a rewards card. After 10 swipes at any of the 11 locations, customers will receive a free meal or product from any one of the participating businesses.

“I think it’s a unique way for a number of businesses — especially independent, local businesses — to streamline their loyalty program,” said Veronica Tessler, the founder of Yotopia Frozen Yogurt.

The 11 businesses participating in the Blend Card rewards program are Yotopia Frozen Yogurt,  Alpha Graphics in North Liberty, Black Stone, Bob’s Your Uncle, Iron Hawk, Monica’s, MopedU, Off Campus Auto Repair, Underground Printing, We Run, and World of Bikes.

Kongshaug first launched the business through $100,000 funding from local investors.

Betsy Potter, the Downtown District operations director, said both cards serve distinct purposes in the city.

“I don’t think it’s a competition at all,” she said. “There’s room for both of them.”

Last week, Yotopia participated in the first-ever public launch of the card. More than 700 customers registered in three hours.

As of now, businesses and customers do not have to pay to participate in the Blend Card system but Kongshaug said if the card becomes popular enough, this may change in the future.

The business has also been sending Blend Cards through the mail to roughly 500 customers that have requested the card through the business’s website. The card now has more than 1,000 active users.

Iron Hawk manager Zack Lee said the business became a member of Blend Card three weeks ago, and he expects the business will profit as it keeps track of repeating customers. With this information, the business can offer these customers rewards.

Iron Hawk will have its promotional event with Blend Card on Sep. 26.

Kongshaug said there are no restrictions on the eligibility of using the Blend Card and hopes to expand the use.

“It’s for anyone. Right now, the value is for people going to Iowa City businesses,” he said. “We hope to expand to other cities and other states, and eventually nationwide.”