Bill Hanifin
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Earlier this week, First Data announced its acquisition of Perka, a member of the legion of “digital loyalty disruptors” that we’ve covered here before.
The announcement puts a heavy stamp on the trending importance of loyalty technology solutions centered on mobile devices and using location-based apps to connect with members. If you buy the idea that loyalty programs must become more “Contextual” as we described in our 2013 Loyalty Manifesto, the news hints at how future program executions will reflect the concept.
Combine this news with FDR’s stealthy acquisition of mobile payments provider Clover last year and you can see a strategy unfolding that will impact how consumers pay for purchases and participate in retail loyalty programs in the future. The meaning of the Clover acquisition is evidenced in the recent announcement of Clover Station, a new breed of POS system designed to serve smaller merchants.
Clover Station is a countertop device that includes a 11.6” touch screen, secure Android-based OS, QR and barcode scanner, Bluetooth, 802.11, Ethernet, high-speed printer and more. First Data says that setup takes 15 minutes, and clients can start using the device with inventory already loaded and its merchant account ready to accept payments. Lots of business apps are pre-built and available for installation and developers can create additional apps using Clover’s open API.
Regarding the Perka acquisition, First Data President Guy Chiarello was quoted as saying “I think it is a simple story on why we bought Perka, since First Data wants to offer more new merchant solutions than just a point-of-sale device …. To do so, we have to embrace these entrepreneurial communities to create our services in a much quicker time frame.”
On the other side of the transaction, Perka CEO Alan Chung commented “The loyalty industry is rapidly moving from being proprietary and closed to open and interconnected. This shift opens up tremendous opportunities for small and mid-sized businesses to run virtually the same mobile marketing programs as major brands.”
The irony in Mr. Chung’s comments is that First Data will seek to use its proprietary network advantage to deploy loyalty solutions to its customers. Small and mid-size business will have a new advantage, but only if they are customers of First Data. Consider that First Data provides transaction and other merchant processing services to over 6 million merchants in over 30 countries while processing about 40% of all credit card transaction volume today and the shift to a new loyalty and payments model cannot be over-emphasized.
How will the competition respond?
