VeriFone’s Deal with CardSpring: Turning Payments into Marketing
Big Data means a lot of things to people. The analytics certainly help. But is it really helping promote new sales and services? That’s the challenge, as companies seek to add coupons and consumer info directly to the payment card or POS. When that finally happens, payment ecosystem players such as banks and payment processors will be transformed into marketers.
Merchant Warehouse, a large processing company, has begun to develop these capabilities as widely accepted APIs. So have other companies such as CardSpring, a 20 person San Francisco company.
Yesterday, CardSpring announced a broad deal with HP’s VeriFone Systems, the POS giant with 20 million locations worldwide. The partnership will integrate CardSpring’s web service platform with VeriFone’s open interface to its gateway. Using the system, developers can create card-linked services for any POS system that VeriFone interfaces with.
The VeriFone deal marks a watershed for CardSpring, adding to a roster of complementary relationships, such as one with First Data that enables it to work with its payment processing customers. CardSpring and First Data work with FourSquare and others.
“It is not just about marketing. It is about a broad set of consumer services,” noted CEO Eckhart Walther during a discussion with us in April. “We really help publishers talk to retailers.”
Walther noted that different parts of the payment ecosystem are currently stuck in different silos, limiting the kinds of information that can be shared. For instance, there are currently different payment processing platforms and development tool kits, as well as different payment channels, such as magnetic stripes, smart cards and e-wallets. It’s especially important as the POS moves from proprietary hardware to more open systems based on tablets.
He suggests that the current relationship between retailers and consumers doesn’t get much closer than a generic ad network. These may display an ad based on what consumers have browsed on the Web.
But “the closer you get to the merchant, the more you can create more interesting consumer experiences,” says Walther. “You want to help Target work with Yahoo on a Sony TV promotion. All these parties want to work together. Right now, “there is no way to do it without sending an entire cloud file.”