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.