KarmaKey: A Restaurant-Focused Mobile Loyalty Program Developer

by Mercator Advisory Group 0

mobile app

We’re in the early days of the mobile merchandising and payments revolution. In these pre-NFC days, we are seeing a lot of new entrants hoping to take advantage of niche markets and likely distribution partners. KarmaKey is hoping to sell to restaurant operators and get its system into those restaurants through partnerships with restaurant ePOS specialists like Micros.

KarmaKey’s loyalty program apparently requires the restaurant guest to enter a code, printed on the receipt, into its app to take advantage of the rewards. For frequent diners, this could be straightforward but it begs for some integration into Facebook or other social network. Long term, an NFC-based solution might replace it but will be a long way off for all restaurants other than QSRs. It’s going to take an EMV mandate, as well as ubiquitous NFC smartphone penetration, for casual and fine dining establishments to invest in pay-at-table terminals.

You’ve probably got a few of those cards in your wallet right now, usually offering you discounts or freebies at your favorite stores if you make a certain number of purchases. Now, instead of making you carry a card around, restaurants using KarmaKey print out a special code on your receipt. You enter that code into the KarmaKey mobile application, and you can redeem it for a discount or other deal at the store.

This is good for customers, KarmaKey said, because you no longer have to store a bunch of extra cards in your wallet. It’s even better for restaurants, because they now have data about their loyalty programs, showing who redeems what coupon and when. That helps them figure out which deals are working and which are not.

So how is the company actually going to get stores on-board with this plan? KarmaKey says it’s partnering with the companies selling point-of-sale systems to these stores. That should give the company a lot of credibility and also help it reach stores at a point when they’re ready to spend.

One note. I suggest to the copy writer of the KarmaKey Web site (still in stealth mode) to use the Urban Dictionary to help in his word choice. Yes, I’m pretty certain the writer is male.

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