• by Laurie Sullivan  @lauriesullivan, March 15, 2011

In what could be a breakthrough in digital, location-based marketing, American Express has developed a simple app that can turn Foursquare's "check-in" feature into a highly secure method for its cardmembers to complete transactions or participate in local store promotions. The app, which simply requires a user to tap a "Load to Card" button when checking in at a retail location, was introduced this week at the SXSW conference in Austin, Texas, and American Express executives are considering taking it nationwide.

"If you left your phone on the sidewalk there would be zero risk of your card number being compromised because it's never passed to Foursquare," Luke Gebb, vice president of global network marketing, who spearheaded the technical specs for the marketing project, tells Online Media Daily. During SXSW, American Express cardmembers were able to access a dedicated Web site to sign up for the "Load to Card" app, and were offered a $5 credit within five days of checking in and making a purchase at any of the 60 participating venues at the conference.

The pilot campaign is part of a broader plan by American Express to offer its cardmembers API-based tools that can power various functions, such as the ability to enroll in apps, coupon fulfillment, and real-time notification of the awards.

The financial services' marketer's engineers built the platform on "core competitive engines" that run its backend financial system in a closed-loop platform supported through APIs, which increases the security of merchant marketing programs. This means that transaction data, card data and merchant data remains within American Express' secure firewall.

As bullet-proof as that technology appears, it's not clear whether it would catch on in the real world as quickly as it did at SXSW. Analyst firm eMarketer points to adoption rates for location-based services from third-party data companies that run the gamut. Pew Internet & American Life Project estimates in a September 2010 report that just 4% of online Americans use check-in service like Foursquare and Gowalla. A Microsoft December 2010 survey estimates that just half of people in the U.S. with location-aware mobile devices use such services, of which a third use location-based services for shopping or coupons.

At SXSW, Eric Friedman describes Foursquare's V3 of the app, complete with a new merchant platform that supports special local deals or discounts when consumers check in to a location similar to the marketing program American Express tested at the event.