PayCloud Does Wireless Loyalty Cards Without The NFC

The payments space is evolving quickly, and lots of NFC-enabled schemes are brewing, but SparkBase has leaped ahead and is launching a wireless store loyalty card scheme that works using existing tech.

SparkBase is launching a free app called Paycloud Mobile Wallet for Chicago-area shoppers who have iPhone and Android smartphones, and it does one simple trick: It "eliminates loyalty cards, allowing customers the option of waving a smartphone at a participating merchant's countertop sensor to check in, redeem rewards and coupons and track their loyalty account status."

Sounds neat, no? The demonstration video tells you more:

The team has signed up 55 local merchants for the first phase of the scheme, and they've also worked to enable deals and check-ins, too. But the primary function is the loyalty scheme, which doesn't need any other tech than the wireless radios already built into smartphones. The merchants themselves only need a simple sensor dongle that's designed to interface with their existing point-of-sale systems. To activate your loyalty points system you simply have to use the PayCloud app and approach the sensor pad.

In many ways, what SparkBase is doing here is pre-empting the NFC credit card/loyalty scheme systems that we're expecting to hit the mainstream over the next year or so. There are distinct advantages from a user point of view—you don't have to haul your coffee shop or record store loyalty cards around with you in your wallet; they're all in the app. And you can consult them at will when you're away from the store, perhaps to plan your next free coffee purchase (if that's how you organize your life). From a merchant point of view, there aren't any physical cards to worry about and the data from the system may give businesses a richer insight into their regular shopper's habits. SparkBase is hoping to have up to 200,000 business participating in the scheme after a bigger roll-out, by 2012. 

And that's where it all gets even more interesting: SparkBase's system has the benefit of not requiring any new tech (NFC coding/decoding chips and antennas) inside phones, and neatly circumvents the tricky matter of a missing NFC communications standard for credit cards and loyalty cards. Adding in actual payment functionality wouldn't be too hard either—requiring merely a deal with a payments provider. But we know that Google's Wallet is on its way, that bodies like ISIS have big plans for NFC payments, and that even Apple may get in on the game. So SparkBase has stiff competition ahead. Handy that it's launched ahead of the rest then.

[Image: Flickr user joelogon]

Chat about this news with Kit Eaton on Twitter and Fast Company too.

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  • terriperez

    I found a site where you can get coupons for restaurant called "Printapon" they are on all over the news, search online

  • Selim Targay

    Kit, are these paid promotions by companies like PayCloud?  These type of apps have been around forever, prime example and the most established one is Key Ring on the iPhone that does everything that PayCloud does + has partnerships with many of the stores to electronically track coupons too.

  • Doug Hardman

    Selim- While I can see that some may make the association, Paycloud is a mobile extension of existing loyalty programs. It's integrated to SparkBase, one of the largest Loyalty processors in the US. We have thousands of merchants all over the world that process on our network daily. Paycloud, along with the associated sensor, replaces the act of swiping the card in a secure manner. Barcode scanners are expensive, and unreliable. What we have is so much more.

    We can also track the times that a person looked at a card, and DIDN'T come into a retailer. This is the kind of information that merchants look for to be able to attract people to come into their store more often.

    The app you speak of only works with retailers with newer optical scanners. It provides no feedback to the retailer, and makes it almost impossible to send you targeted rewards and offers.

    Paycloud won the 2011 Electronic Transaction Association's "Technology Innovation of the Year" because it really is revolutionary. Especially in the electronic payments industry, where 95% of retailers get their Visa/Mastercard processing from.

    Kit: We're working with several networks now to have Payments included on future release of Paycloud.

    (And I paid nothing to FastCompany or Kit for the article.)

  • Kit Eaton

    Did you actually read the article? KeyRing merely *replaces* your existing loyalty card with a digital clone. PayCloud is a system that tracks points, gives you offers, rewards, checkins--all in a single app. Plus it has a wireless infrastructure that allows for much more data-rich interactivity in the future. The only thing it doesn't do is allow you to make payments.

    As such, it's a valuable hint as to how wireless payment apps will work in the next year or so, with a single wireless interaction handling your loyalty card updates, payment, and uploads of content like adverts or games to your phones.