Jul 23, 2007

Mobile payment + targeted coupon delivery in a few hundred milliseconds

Frédéric Mayance sent me this video of a mobile payment demo using Welcome’s NFC applet integrated with a payment application in a mobile phone. Rather than simply doing a basic, boring payment transaction, the demo shows the payment terminal also delivering a targeted promotion to the customer, based on criteria set by the merchant. Enter the amount on the POS terminal, tap the phone and the payment receipt is printed, which now includes an offer that says “Buy one value meal, get a free dessert”.

“At each payment transaction", says Frederic, "the POS analyzes the behaviour data cookies contained in the mobile phone, compares them with the thresholds needed to trigger a promotion or message, and finally updates them according to the details of the transaction. The POS also analyses other data such as the customer’s date of birth and other segmentation criteria. All of this is done in less than 200ms therefore allowing a combined transaction in one single tap.”

Now, some people will wonder why this video shows the coupon being printed on the receipt rather than stored on the mobile phone in a paperless format. Some offers are useful in an electronic format, but in many cases printing a paper offer is much easier for merchants and customers to deal with.

From the merchant’s perspective, no integration is needed with the scanning device. Powerful targeting methods can be used to deliver promotions using a simple payment terminal. The customer has been here before, but it's been a long time since his last visit? Print an offer to encourage the customer to come back again quickly. Trying to get customers to sample other items, not just the basic lunch menu? Print an offer for a different sample item at each visit, rather than giving the same samples out over and over again.

The vast majority of promotional marketing offers are for specific items or groups of items, like the “Buy one value meal, get a free dessert” offer in the video. A paper promotion is treated just like any paper coupon that cashiers are already trained to accept, so there is no impact on the merchant’s procedures or systems. When the coupon is electronic, the process becomes much more complex and requires substantial integration with the retailer’s scanning systems, which is not always a viable option for most retailers. It’s easy to forget that the real benefit to the merchant is the targeting ability that new payment technologies offer, not paper elimination.

The applet used here is based on the one that Welcome uses inside standard contactless cards, so the same infrastructure can be used for both contactless and mobile payments. The added value to merchants makes it much easier to expand contactless and NFC acceptance beyond the very small number of shops that are interested in contactless in its current boring and low value format.


Ben said...

Hi Aneace,

I work for a technology showroom in Paris called l'Echangeur. I am very interested in this solution (mobile NFC + direct coupon printing). I would love to demo this solution here : can you contact me bthomas@echangeur.fr ?


Doug Yeager said...


I'd would like to send you a link to another YouTube video your readers should find interesting. I don't know your email address. I hope this goes to your email before it posts.

Doug Yeager said...

oops, i forgot to leave my contact info:
doug AT elementalknowledge DOT com

Timo said...

What about other ways of making mobile payment more useful, such as location specific information or collaborative filtering. Perhaps this shouldn't just be thought about from the merchants perspective. How about proposing an application that the user themselves or network owns, that benefits mobile payment as a whole.

My students have been working on these issues:

Aneace Haddad said...

Timo, I liked the work on collaborative filtering. It is something Welcome is also working on, but from the merchant's perspective as an automated cross promotion tool.

Anonymous said...

Interesting solution. However, providing a coupon at checkout does not seem to be very effective solution. To me more effective, the targeted/personalized coupon should be delivered while the shopper is entering the store, so that their purchase can be influenced by the coupon/offer delivered to them. The only solution that I have seen that could deliver this kind of message is the meshbee solution from outermesh (www.outermesh.com)

Aneace Haddad said...

Hi Anonymous. Thanks for your comment. I wish I got a dollar every time somebody said this to me. Sure it's nice to influence behaviour just as a customer is walking into the store. And there are lots of ways that merchants do this already. The problem with this type of comment is that it neglects a huge body of promotional marketing activities which represent a much bigger market. It also means that new equipment is required, like kiosks or, in the case of the meshbee solution (which I just looked up) "a small keychain-sized wireless loyalty card that is used in conjunction with Mobile phone and Web applications". Nice, but not really mass focused. Who wants to wait in line at a kiosk before going shopping? Who wants to carry around yet another little divice? Who wants to get bombarded by mobile messages that look a lot like the internet spam that everyone is tired of? Sorry, anonymous, I don't think that project is going very far in its current format. Another solution looking for a problem.

hanum said...

there is a FaceCash the mobile payment application. Tt will be available on iPhone, BlackBerry or Android phones. Then type in your bank account information, Social Security number, and driver’s licence number, and upload your picture. That’s it. You can now use your phone to make pretty much any in-person transaction, whether at a restaurant or at a grocery store — as long as the merchant has signed up for the service. To accept your payment, the merchant simply scans the FaceCash barcode on your phone with a scanner, and your picture will pop up on their computer screen — which helps them avoid fraud. They then approve your payment. Dead easy. And slick