Three Types of Mobile Credit Card Processing Loyalty Apps

If you’ve been following the growth of mobile credit card processing, you may have come across a variety of new apps to help merchants manage their loyalty programs.

Some strictly help with loyalty programs. Others can handle processing credit cards as well. What’s for certain is that new apps are popping up all the time, and it’s hard to keep track of them all.

To help understand these apps a bit better, think about them in three broad categories.

Digital Punch Cards

These are digital versions of the punch cards that you carry around in your wallet. They track your purchases so that you can redeem an incentive after so many visits (think buy 5, get one free).

Usually, merchants will have a laminated card with a QR code on it their store, and consumers scan the code with a smartphone app to record their purchase.

One thing to remember is that these apps are not tied into the POS system.

Telugo, Klikt and Punched are three of the most popular apps in this category. And while they allow the user to empty their wallet of bulky loyalty cards, different merchants may use different apps, so consumers may have to download a handful of them.

Sophisticated Loyalty Apps

Other apps, including SpotOn and Belly, allow for more sophisticated loyalty programs.

These apps may be integrated with Facebook, Twitter or other social networks, allowing users to share their experience with their friends. Many of the apps require merchants to have a tablet or iPad at their store so that customers can sign up and check in.

Loyalty/Payment Apps

And yet other apps combine loyalty programs with mobile credit card processing.

The most famous of the apps that combines processing credit card payments along with a loyalty program is the Starbucks Mobile App.

Another solution is LevelUp. Users download the app then attach a credit card to it. The merchant installs hardware in their store, including a mobile phone. Then the user makes a purchase by holding up their phone to the merchant’s phone.

Some apps, like TabbedOut and Vibe, process credit card transactions by integrating with existing point of sale systems.

Merchants are just starting to experiment with these apps, trying to figure out what works best for them. For example, a merchant I know is promoting two apps at the same time.

Every day, some apps fold and new ones are born. It’s important to keep up so you can stay up-to-date on this ever changing space.

Are your merchants experimenting with loyalty apps? Which ones seem to be their favorites so far? Let us know with a comment.

 

Jeff Zimmerman, Vice President of Product Management and Marketing at Clearent, has worked in finance, marketing and product management for 15 years. Clearent can offer an array mobile credit card processing solutions for your merchant program, many of which go beyond just processing credit card payments and include loyalty program integration.

What’s Next for Mobile Credit Card Processing?

Everyone’s talking about mobile credit card processing.

Magazine editors, blogger and pundits are constantly forecasting the next development, the next startup to seize the industry, and how it will all affect merchant service providers. With so much buzz, it’s hard to keep up.

But the gist is that consumers are slowly adopting mobile payments, and that this rate should soon increase. A recent survey by MarketLive survey showed that during the 2012 holiday season, 16 percent of consumers planned to do all or most of their shopping on a tablet or smartphone. This was up from 3 percent in 2011.

Not Just One Option

When many merchant service providers think about mobile credit card processing and mobile payments, they think of Square. The company has been in the news a lot recently. They announced a partnership with Starbucks (Square will process all debit and credit card transactions for the company). They announced fixed merchant pricing. And they launched a television ad campaign.

Although Square is the big name in mobile processing right now, remember that there are many other options available. Your processor can offer you other solutions to compete with Square, including ePN Mobile, Magtek QwickPAY, VeriFone PAYware Mobile and TSYS Mobile Payment Acceptance.

The Jury is Out On...

Mobile Wallets. There’s a lot of buzz around them and many options have been launched, but consumers aren’t adopting them quickly. Furthermore, there aren’t many standards for mobile wallets, so some in the industry are questioning their security.

Near Field Communications (NFC). Near Field Communications is a type of technology that some in the industry have praised as the next big thing for mobile processing. But at a recent conference, many of the speakers were not as optimistic. NFC isn’t the only way data can be exchanged between mobile phones and POS systems. So the future of mobile payments doesn’t necessarily depend on it.

And the Future Holds...

Mobile credit card processing is in flux right. No one really knows the future. But you can count on one thing: the technology that becomes king will be the one consumers like best.

Most likely, it won’t be a simple option. It will probably include coupons and tie in to loyalty programs, offering extra value to the consumer instead of just being another way to pay.

What you think the future holds for mobile credit card processing? Which solution do you think will grow to dominate the industry? How will it affect you? Leave a comment below. We’re eager to hear your predictions.

 

Jeff Zimmerman is Vice President of Product Management and Marketing at Clearent. He has 15 years of experience in finance, marketing and product management, and has held management positions at Network Solutions and Intuit. Clearent is staying on the cutting edge of mobile credit card processing (http://www.clearent.com/financial-institutions/products-services/) and as one of the fastest growing merchant service providers, (http://www.clearent.com/about/) offers an array of different mobile payment solutions.