LivingSocial to Focus on Loyalty, Not Mobile Payments

by Mercator Advisory Group 0

LivingSocial says it has no plans to become a player in the mobile payments space, but it appears the daily deals company is heading down a road Groupon just paved.

Dickson Chu, the former Citi executive who is now LivingSocial’s senior vice president of merchant services, told reporters recently the company this summer will pilot three programs with retailers centered on payments and loyalty. LivingSocial competitor Groupon recently announced it was launching a loyalty program.

From an All Things D article:

[Chu] declined to provide specifics, but LivingSocial’s CEO Tim O’Shaughnessy verified that it was not interested in competing directly with payment processors.

That’s sort of a novel comment given that so many companies have recently entered the space to compete against Visa, MasterCard and American Express, like PayPal or Square.

“We have a big business here, and we probably aren’t going to be a real active Square competitor,” the company’s chief said.

We here at Mercator Advisory Group continue to question the long-term viability of the daily deals business as merchants rarely benefit in the long-term. But loyalty programs attached to companies such as LivingSocial and Groupon could help spur more consumer foot traffic to participating merchants.

LivingSocial might have an advantage over Groupon with Chu spurring this project because of his Citi background. Citi’s loyalty program, ThankYou Rewards, is one of the most popular in the industry.

Click here to read more from All Things D.