Commentary

Mobile Payments, Block by Block

Mobile payment platforms continue to come in all shapes and sizes.

A few weeks back, I spent some time with Bill Clark, CEO of Spindle, and his team discussing some of the varying approaches to mobile payments.

The idea of Spindle is to launch its mobile payment platform city by city, and market it essentially block by block.

Spindle aggregates different businesses on its technology, kind of like how Shopkick is a platform or digital mall for major retailers.

From a consumer’s viewpoint, the Spindle app (MeNetwork) shows participating merchants based on location. Clark says one of growth drivers is for consumers to tell a retailer that other retailers in the area are using the app, suggesting that they should as well.

From the merchant’s viewpoint, the Spindle platform provides more than just mobile payments, by allowing retailers to interactively offer deals and loyalty programs to nearby consumers.

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Clark says the company already has merchants using it in 85 cities, including New Orleans, San Francisco, Denver and Salt Lake City.

The company just got a boost to its city-by-by-city approach by inking a deal with Multi-max, the manufacturer of vending machines, which is going to include the Spindle payment technology in its K-Cup vending machines.

Included as part of the deal is low cost payment processing services from Cardis USA. As part of the deal, Spindle can distribute the K-Cup systems to businesses and coffee service suppliers throughout the U.S.

This is yet another approach to mobile payments, targeting smaller businesses on a local level. And rather than providing only mobile payment capabilities, Spindle hopes the added loyalty and customer targeting features will attract more merchants.

In this approach, the face of the brand is Spindle, or more accurately, the MeNetwork app.

A different approach is white labeling such technologies, as companies like Roam and Paydiant are doing behind the scenes for businesses such as Subway.

In those cases, the consumer only sees the brand while the payment and various processing technologies are quietly handled by others.

Both approaches continue to proliferate in the market as more and more merchants warm to mobile wallets in all of its shapes and forms.

For mobile consumers, payments by cash, check and credit card await to be beat.

4 comments about "Mobile Payments, Block by Block".
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  1. Jason Gross from VeriFone Media, October 24, 2013 at 6:03 p.m.

    Whether or not Spindle markets its app this way to consumers, I think we in the industry do a disservice thinking about "wallet" apps as payments apps for which you need a directory of locations at which they're accepted.

    Can you imagine a credit card that needed to come with an acceptance directory?

    Consumers shop in one of two ways - 1) they shop at their preferred merchant and pay with whatever method is accepted there, or 2) they see a "deal" and visit the merchant in order to redeem it (method of payment being secondary).

    I think a fundamental issue of "wallets" is their positioning as payments apps. If for payments, they shouldn't need to be a separate app - but should be a container inside a merchant app. And if their real value proposition is as "deals" apps, then they should execute and market as such.

  2. Bill Hewson from Hewson Group, October 24, 2013 at 6:21 p.m.

    How is the Spindle Service any different than Level Up or any of the other dozen mobile payment/loyalty points aggregators now cropping up? Also, their counting on consumers to spread the word to other retailers is a substantial amount of "hope as a strategy" in my experience.

  3. Chuck Martin from Chuck Martin, October 24, 2013 at 8:18 p.m.

    Yes, Bill, but they also have a substantive on-the-ground sales forces.

  4. Chuck Martin from Chuck Martin, October 24, 2013 at 8:20 p.m.

    Agree with Jason about the confusion around wallet/payment meshed in with the notion of loyalty vs. payments inside branded apps. Still have a ways to go here, as I'm sure you realize.

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