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.

Durbin Amendment Brings Risk of Debit Credit Card Processing Scams

As you probably know by now, the Federal Reserve Board came to an agreement on how to regulate debit card interchange. As of October 1, every merchant with Interchange Plus pricing received a cut in their debit card processing fees, which means they will start seeing significant savings for their business.

More savings means more profits for your merchants. Because of this, many less informed merchants will become the target of debit credit card processing scam artists. In the weeks to come there may be “specialists” who come to your merchants door stating that they will be able to save them loads of money. All they would have to do is allow the specialist to examine their statement and the specialist would pass along this information to his payment processor and the card associations, with whom he had previously worked out a deal which would save the merchant an exceptional amount of money.

A knowledgeable merchant service provider knows that these “savings” the “specialist” is talking about are a direct result of the Federal Reserve Board’s decision. However, to the uninformed merchant this looks like an excellent business opportunity. Ensuring that your merchants do not waste money, and that you do not loose business, starts with education.

Many merchants are aware that the new Durbin amendment will affect the way their business handles debit credit card processing. However, many are not aware of the con artists out there who are stalking them, especially those with larger profits. As they see it, the more the merchant has to loose the more they have to gain.

Explaining the risk of debit credit card processing scams to these merchants is a good place to start, and then you can advise the rest of your merchants. When speaking with your merchants about such risks, it is important not to preach to them. Rather than telling them what not to do, share with them some actual stories of businesses that have been taken advantage of, as a cautionary tale. They can then reach their own conclusions, which will hopefully be that you are a trusted merchant service provider whom they can stay with for a long time.