EMV heralding smart loyalty in US, at last?
In the US, the impending nationwide rollout of EMV smart chips on debit and credit cards has opened up a whole range of possibilities and opportunities for loyalty marketing via the payment card platform, according to smart card loyalty technology patent-holder SCTN.
The company's US patent (no. 5,806,045) is expected to provide the company with a lucrative future now that Visa has announced plans to take an aggressive step toward curbing credit card fraud in the United States by accelerating the transition to embedded EMV (Europay, MasterCard, Visa) chips in both debit and credit cards.
EMV is a global standard for micro-processing chips that are embedded in credit and debit cards to provide additional security. But this also provides card issuers and their industry partners to include other applications on their cards, including loyalty programmes, transport ticketing, access control, membership identification, and others.
The consumer market is certainly the focus of some furious battles. For example, mobile carriers AT&T and Verizon Wireless have announced plans for a venture to displace credit and debit cards with smartphones for consumer payments, posing a threat to both Visa and MasterCard.
At the same time, Apple and Microsoft recently partnered with other high-tech companies to outbid Google's US$900 million bid (with a combined US$4.5 billion bid) for various Nortel patents, while Google is reportedly spending some US$12.5 billion on buying Motorola Mobility. But the big prize for Google isn't necessarily Motorola's line of cellphones, computer tablets and cable set-top boxes; the prize is Motorola's 17,000+ patents which are expected to provide Google with a crucial weapon in an intellectual arms race with Apple, Microsoft and others to gain more control over the increasingly lucrative market for smartphones, tablets and other mobile devices.
SCTN also highlighted the growing opportunity for handheld portable devices, smart cards, smart phones, and Near Field Communications (NFC) devices, with related announcements coming almost on a daily basis. SCTN itself offers an EMV standard for loyalty on a smart chip - an application which could be critical to consumer acceptance and adoption in the mobile payment and NFC markets.
In August 2001, even Citigroup launched a mobile rewards application with Best Buy that enables its cardholders to redeem ThankYou rewards. The free mobile app runs on Apple iPhone and iPod devices, as well as on smartphones that use Google's Android operating system.
Google is essentially an advertising and marketing company which says that it sees its future "in mobile payments that require a smart phone". This means going local, and the retail point-of-sale is most likely to be its intended target market. SCTN says that its own software could be a good match for this ambitious goal because it enables loyalty applications that could be downloaded onto handheld portable devices (including smart cards, mobile phones and NFC devices) which are the catalyst and media for so many new streams of revenue and commerce. In fact, according to IE Market Research, NFC alone "has the potential to replace cash and other payment methods, and could account for a third of the US$1.1 trillion global mobile payments market by 2014."
The SCTN patent no. 5,806,045 is officially described as: "A method and system for allocating and redeeming incentive credits on an integrated microcircuit chip platform", and the Company has registered patents in the United States, Canada, Mexico, Japan, and Australia.