A few months ago, we wrote about ByteLight, a Cambridge MA indoor positioning startup that’s pioneering the area of in-store lighting to communicate data to smartphones. It’s a novel take on retail customer engagement that goes beyond what others have done like Shopkick (sonar), Red Laser (barcode) and Google Wallet (NFC).

Today the company announced it has taken this to a new level. In addition to the high-barrier retail lighting installs, its technology now also resides in a small box that can be placed at the point of sale. Known as Light Field Communication reader (LFC), it enables tap and go check-ins, payments, loyalty programs and other features.

These things will develop over time as retailers and the app developer community innovate on the idea, says ByteLight’s Kyle Austin. As we discussed in our previous write up when ByteLight launched, the strategy remains to provide underlying technology on which third party developers can build different applications.

This has already been done if you consider the partnership that ByteLight also announced today with cloud-based retail platform Appconomy. The partnership puts ByteLight’s LFC’ readers at the POS of several chain retailers in China that are on Appconomy’s platform. The play here will be  for shoppers to gain and redeem loyalty points at the POS.

We expect more partnerships to come as the new form factor lowers the barriers for retail partnerships, including the long tail SMB segment. Of course, the smaller package means it’s not as robust or comprehensive as the full retail lighting installations, but the company is viewing it as a good proof of concept to get a foot in the door with retailers.

Meanwhile, Austin lists other advantages: the LFC boxes are about 1/20th the cost of NFC readers and are much more compatible. Indeed, while NFC faces its own chicken-and-egg compatibility struggles, all smarphones with a light meter (camera) are compatible with LFC right out of the box. LFC also has a longer range (wherever light travels).

These advantages stack up well against NFC and could represent yet another horse in the race for mobile shopping, engagement, loyalty and payments. It will be a company to watch closely in these emerging and important areas of mobile commerce.