The weeklong South by Southwest Interactive festival (SXSWi) marks the start of a pilot program from American Express Co. to offer exclusive location-based offers to Foursquare users.

Users who register their American Express credit cards with Foursquare are eligible for merchant discounts and special prizes, including one of 18 SXSW badges Foursquare is handing out. Festival attendees can also take advantage of the program?s Spend $5, Get $5 promotion at participating Austin, TX-based restaurants, bars and hotels.

?We are very much focused on showing the value of card membership to our customers through applications of their choice,? said Luke Gebb, vice president of global network marketing at American Express, New York. ?We know a lot of our customers love to use apps like Foursquare.?

How it works
When users check-in to one of nearly 60 Austin, TX-based vendors on Foursquare and proceed to spend at least $5, American Express will credit another $5 to their account. Customers simply have to tap ?Load to Card? within the Foursquare application, and pay using their American Express to receive the funds. The statement credit should appear in three to five days.

The credit card company will also donate $1 to Grounded in Music, an Austin, TX-based nonprofit, every time a customer uses their American Express card for the first time at one of the participating merchants.

?It also triggers an exclusive Foursquare badge,? said Shari Forman, director of social media at American Express, New York. ?It?s instant gratification that they?ll get from swiping.?

With the companies dishing out deals, dollars and badges all around, people are bound to wonder, what?s in it for American Express?

?We are going to be able to provide data to merchants on how these digital behaviors operate,? Mr. Gebb said. ?We think this technology will change how location-based marketing is done."

An inside look at how to check in to locations with the Foursquare app

How SXSW ties in
The SXSW festival?which includes music, interactive and film?provides the perfect opportunity for unveiling the new partnership between American Express and Foursquare.

?[The festival] is where new functionality comes to life,? Ms. Forman said. ?So we knew this was the right time and the right audience for us to test drive this.?

Foursquare was originally launched at SXSW in 2009.

The partnership is a big step for a comparatively new company like Foursquare, and could also be a way for American Express to reach a younger market that Foursquare has already tapped into.

The companies plan to officially release the new functionality in the months following SXSW.

?We are rolling out this technology both nationally and globally, and we have no specific plans to announce another partner right now, but it?s definitely our intention to get this out there,? Mr. Gebb said.