Let’s eliminate plastic loyalty, reward, and payment cards and replace them with device tokens

big wallet and phone cardsI'm not sure I'd want anyone to see all that's in my wallet in the open.

Every time I open the Key Ring app on my iPhone, I wonder why the stores whose cards I have stored haven’t linked the card to the device such that you don’t need the card.  There are many stores that let you access it by phone number (Walgreens and Rite-Aid are among that group), but picture holding your phone up to an NFC terminal and having the card load for you at checkout.

With Apple devices, you have Wallet.  Android has WalletPasses.  Microsoft’s version of it all is simply Microsoft Wallet.

Businesses that still use loyalty/reward cards should evaluate their programs to see if they can integrate the savings and rewards into their store app.  Assuming the app has permission form the user, it could use your historical purchases to generate a shopping list of things you frequently purchase.  If not via store apps, I envision a future where the device detects your presence in the business’ geofence and launches the app which loads the token equivalent of the loyalty/reward card.  Some stores, such as Home Depot, have gone as far as including a virtual map of the store within the app.  For checking out, it would be great innovation that as soon as you enter the geofence of the front end, it automatically makes the token active and ready to be recognized by the register.  Since many consumers habitually use the same form of payment, the payment token would come active and ask your permission to pay the merchant.  If, historically, you use your Discover card to pay for goods at a given business, the phone would learn this and offer to use it at the checkout of that business.  To that end, within the phone, the user could create a list of locations where a card is likely to be used and allow Location Services to determine which card is most likely to be used.  As always, the user would have to approve the transaction.

Device tokens have a number of advantages:

  • Tokens can be designed to be used with only one user account (Google, iCloud, or Microsoft), but customizable such that a device change doesn’t cause a problem (I.E. their iPhone is stolen, but a friend offers them a Droid in the interim).
  • They can work with geofencing and Location Services to see where the consumer is and perform a set of actions and with minimal user input.
  • They’re updated in real-time and can be sent straight to your phone.  There’s no more concern of “Will my card still work considering I’ve haven’t been to this store in five years?”
  • Tokens mold to the phone and to specific operating system settings and options.  If you create a shopping list on your Kroger app, the phone’s OS could convert that list into a list using the OS’ native app.

Like anything technological, not everyone will want to take this leap.  Not everyone owns a smartphone or mobile device, nor do they want to.  Some people would rather keep their wallet uncluttered – after all, if you’re only at the library once a week, does the card need to go in your wallet, or in your center console?  Maybe you visit Starbucks three times a month, but aren’t interested in the rewards.

Another benefit to improving the technological features of loyalty cards would be marketing.  While nobody likes being marketed to or advertised to, people love saving money.  Instead of the paper store flyer presenting you with hundreds of savings options, why not apply the coupons and savings automatically as you shop?  In a data mining age, instead of printing millions of flyers, sixty percent of which will end up discarded or recycled, how about targeting the savings to the consumer’s preferences?

I’m looking forward to a time when my phone and my tablet are the only two devices I am traveling with.


About the author

Mike Rana

Mike Rana is one of those people who is hard to define, though he's not immune to being labeled for something. He likes to talk about many topics including technology, business, politics, education, psychology, and human behavior. In his spare time, Mike enjoys traveling, people watching, analyzing the world around him, writing about his life experiences, absorbing information from various social media channels, and trying to be the voice of reason in the political arena.

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