The Discovery Economy: How Your Credit Card Is Becoming A Data, Discounts Doorway

The fast rate of credit card innovation continues apace. Is this only about money? Or is it also about the discovery of new things and ideas?



Square and similar systems have changed the way we pay for things. But they are not alone. Powered by simple smartphone systems and near-field communication tech, your credit card will soon become a doorway to discovering new stores, bargains, and ideas.

Yesterday American Express and Zynga revealed what at first blush could’ve been an Onion story: A plastic card powered by AmEx’s Serve system, enlivened with Zynga’s cutesy graphics and directly linked to your Zynga-powered online casual gaming experience. By paying for things in real life, the card affords you rewards much as you’d collect air miles–but in this case you get in-game credits for FarmVille. That’s pretty limited, although it may “introduce” you to new aspects of the game.

But AmEx has bigger plans. FarmVille is just an early experiment, and the idea is eventually to let brands advertise in games and, as a reward for interacting with the brand in the game format, you’ll get rewards added to your Serve card that you can spend in real life. AmEx makes money off the whole interaction, the brands get some very targeted advertising, and the consumers get a dash of fun–and may spend Serve rewards in a new place or on a new service they’d never before considered.

Meanwhile a new startup has plans to intimately link in-store loyalty deals with credit card information, turning the cards into much more than a payment tool. Mirth rewards you for being a regular at a merchant that’s signed up to its service: All you have to do as a consumer is set up a Mirth account, tap in your credit card number, enable Mirth to share some basic personal information, and then pay for something in the Mirth-ed store using the same card. Through regular visits you earn rewards in the form of discounts, and the retailers gets to discover all sorts of useful analytics about how and where you use your card–potentially a data goldmine.


But the big trick with Mirth is that the discounts may be used in other Mirth stores, which means the consumer is incentivized to use a service that they may not have previously used.

These systems work through more or less conventional plastic credit card tech, but the mobile payment revolution is sweeping slowly around the world, and our smartphones are going to take over many of the roles of plastic cards. That’s when services like Mirth and a similar new startup Cardify come into their own because they let merchants geofence their offers: Walk into or even near a store with your app enabled, and it’ll ping you to offer you a deal that could get you inside to try or buy something you may not have beforehand, all based on what the merchant knows about your spending habits thanks to your credit card info.

Another taste of the future comes from VeriFone’s latest news about its iPhone payment system. As well as the obligatory Square-like card reader and payment app, it also allows your emailed payment receipt to hook up to a social network like Twitter, and also for the acutal payment act to initiate a coupon-like special offer via tight integration with Facebook offers–which the merchant can design themselves.

None of this is really about simple in-store coupons brought up to date with smartphone tech. Rather,  soon enough simply using your credit card may trigger a batch of carefully tailored offers and tempting discounts at other stores. That is, daily deals are about to become hourly retail come-ons.

[Image: Flickr user Artnow314]

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