Here are a few stories that caught my attention this week in the payments space.
Retailers check-in, teenagers check out
Check-in services appear to be making more deals with card companies and retailers who want to test the waters to see if there’s any there, there. Having gained an audience and trained them to perform simple actions on their smart phones, these services now need to tie the act to something meaningful — usually a discount. On the heels of American Express’ Foursquare trial at SXSW back in March, rival service SCVNGR has announced a deal with American Express that delivers the discount through the AmEx card. This prevents an embarrassing argument with a sales clerk who doesn’t understand why you’re showing him the screen of your smartphone. SCVNGR is an interesting entry in the market as it not only lets you create new check-ins, it also lets you come up with fun challenges and add those to the mix (like making origami out of your burrito’s foil wrapper).
Retailers are sniffing out the services, too. Starwood, which manages hotel brands like Sheraton, Westin, W and others, is encouraging check-ins by awarding 250 Starpoints (the hotel equivalent of frequent flyer miles) for each check-in, along with the chance to unlock a free night at a Starwood resort. And Murphy USA gas stations in the Midwest are offering $2 off a $20 gas purchase if you check-in — this after a test program giving away a pack of Stride gum drew 15,000 check-ins over a weekend. These discounts may seem bolted on to the Foursquare experience, but they’re built-in to services like Shopkick that are all about coupons and rewards. Fierce Developer has an interesting interview with Shopkick’s CEO this week, in which he divides check-in apps into three categories: social, gaming, and shopping.
But like coupon clipping, are these services destined to remain the focus of the bored, the middle-aged, and the lonely? A survey by Dubit, a UK-based communications and game-development company, shows the services getting a big yawn from teenagers. Dubit asked 1,000 kids between 11 and 18 years old, and found that less than half of them had heard of any of the check-in services. Facebook Places fared the best with 44% recognition, but even among those who had heard of it, few see the point. This confirms my own anecdotal research, in which I’ve noticed that while I am pointlessly checking in to a senseless system, my own teenagers are more likely to be texting with a real person on the other end — so their friends already know where they are. Who would have guessed that texting would be considered the more social option?
Skype and Facebook Credits
One of the more interesting observations in all the coverage of Microsoft’s $8.5 billion agreement to buy Skype was Om Malik’s suggestion that the big winner of the deal was actually Facebook, which was happy to see Skype avoid Google’s grasp. Instead, Skype has now landed in the camp of a major Facebook investor, which means Facebook could get access to its brand and technology without having to go through the hassle of an acquisition. Malik foresees a mutually beneficial deal where Facebook delivers a wider audience to Skype, which in turn provides a solution to voice-enable Facebook Chat. What’s more, Malik pointed out, the deal could mean it becomes possible to use Facebook Credits to buy time on Skype’s premium service — yet another possible route for Facebook’s virtual currency to enter real-world goods and services.
Can Apple and Facebook take their payments out of the garden?
As Apple and Facebook maneuver to ensure that third parties using their channels also use their payment systems, there’s speculation about whether and when they will try to take their proprietary payment systems out of their walled gardens into the wider world. Michael Koploy, an analyst at Software Advice, paints a picture of Apple extending its retail expertise beyond its own properties and, with an NFC-capable device, enabling smarter shopping at other physical stores. Koploy imagines the iPhone supplying the shopping list, guiding the user through the physical store to find items, scanning and pricing items, alerting shoppers to better deals elsewhere, and speeding up payment for a quick exit. It all seems feasible, but to me it somehow feels like the misery of the self-checkout stand stretched out to ruin the entire shopping experience. What’s more, it seems to overlook one of the key advantages of Apple’s retail stores: the hip, T-shirted sales associate who helps shoppers understand complex products and moves them effortlessly to purchase, checking them out where they stand. Apple’s yet-to-be-discovered competitive edge may lie in a new division that offers sales training.
Another interesting piece comes from Kim-Mai Cutler at Inside Mobile Apps who speculates about a battle between Facebook Credits and in-app payments (this was originally published in February, but it’s worth a look if you haven’t seen it). Cutler says that given Apple’s and Facebook’s failure to find some way for Ping and Facebook Connect to play nice, it seems unlikely that Apple would allow Facebook Credits into its stores. However, if Facebook took its Credits payment system out of Facebook’s walled garden and onto the web, and if the games in which Credits are valid currency get written in code-once, play-anywhere HTML5, then there’s no reason that the Credits couldn’t get used on tablets that support HTML5. Cutler’s column raises the question of whether this alone could be reason enough for Apple to consider not supporting HTML5. Maybe, but it’s difficult to imagine Apple not supporting a dominant display technology that enables universal interactivity and animation and — oh, wait … never mind.
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