Loyalty and the POS Terminal in Your Pocket

by Mercator Advisory Group 0

Here’s an interesting set of musings on the future of payments and how the online and offline worlds will blur soon. I particularly like the example of watching TV and having your smartphone know what you’re watching and presenting relevant offers. The same experience will hold true in retail stores. Your smartphone will know where you are, serve up offers, remind you of rewards points available to you from prior visits, and even become the payment initiation device.

The mobile payment revolution has been about to happen for a decade. Mobile payments won’t happen overnight but, unlike all those past predictions, the conditions for sudden growth are firming up. As I’ve said for years, never bet against a broadband connection with intelligent devices at the edge. That’s exactly what 3G/4G wireless and smartphones possess. Add in the smartphone’s programmability with software from thousands of creative entities and you have the conditions for big changes.

The real power in converged online/offline interactions will come from a hybrid of realtime contextual offers, deals, and advertisements which can change a consumer’s behavior long before any transaction occurs. Recommendations and offers that take into account nearly everything about you as an individual.

This is a why Steve Jobs strategically entered mobile advertising with iAd

. Contrary to what Carol Bartz thinks

, Apple is thinking way beyond serving brand advertisements within mobile apps. The real potential is about blending offline and online data about you as a person, data that can be transferred across services and devices. iAd is absolutely a secret weapon for Apple to ultimately leverage its micro-payments franchise to influence you at the point of sale. But they could work not just while you’re mobile, but at home as well. Imagine watching rich immersive ads on your Apple TV, which are tailored based on your offline behavior while your iPhone simultaneously knows what channel you’re watching and gives you a click-to-act offer or saves a deal which you can unlock later.

And though Google bought Admob for a simpler reason (to own mobile/online display), it’s clear that their success with Android and momentum with Google TV is driving them toward similar ambitions.

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