Thanks to that integration, retailers can use the social network to reach out to selected customers with offers and free gifts. When a person redeems such an offer, an update on Facebook lets friends know. “You can choose your most loyal customers, and those with the most friends, to target with coupons,” says Judy Balint, Bling’s head of business development. Bling transactions are the first of this type to draw money from a PayPal account.
Other startups are working on the receiving side of mobile payment. Jack Dorsey, the inventor and cofounder of Twitter, has founded a new company called Square, which has created a small white credit-card reader that plugs into the headphone socket of a smart phone or tablet. After a customer’s credit card gets swiped through the reader, an app on the device processes the transaction. For the cost of one conventional wireless credit-card reader—typically $900, says Dorsey—a business can buy a handful of iPod Touches that perform the same task when combined with a free Square readers.
Square makes money by collecting a fee of 2.75 percent plus 15 cents from every transaction, although it must still pass on a portion of that to the customer’s card provider.
For that money, Square offers retailers novel features such as a new kind of electronic receipt. Instead of just a scrap of paper, a Square receipt is sent by text or e-mail and can feature a picture of your purchase, information on how many times you’ve visited that store in the past, and a map showing where you made the transaction. Consumers may one day be able to share their receipts on Twitter or on a location-based service, says Dorsey. Interactive receipts could also serve up coupons or other promotions.
Whatever the mechanism, says Dorsey, using mobile phones to collect payment requires businesses to think differently. “Payments and receipts are really a publishing platform,” he says. “It’s just one that has never properly been looked at.”