Wand replaces loyalty card and cash

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By: Wise Marketer Staff |

Posted on December 28, 2001

Wand replaces loyalty card and cash

No, it's nothing to do with Harry Potter. It's a system using Radio Frequency Identification that has been broadened to include loyalty programmes and targeted marketing.

Radio Frequency Identification (RFID) is not new to the point of sale environment. Mobil introduced its Speedpass in 1997 and now some five million US motorists use it to pay for their petrol. The Speedpass is simply waved near the petrol pump and the transaction is charged to the motorist's chosen credit card. More 400 McDonald's Restaurants in the Chicago metropolitan area also accept it.

Now, FreedomPay, a company supplying cashless transaction systems, has bought ZebraPass. The FreedomPay system uses RFID technology to transfer payment from the consumer to the merchant. The consumer simply carries a small "wand", usually attached to a key fob, which interacts with a sensor at the merchant's point of sale and automatically transfers money from the consumer's account to the merchant within 15 seconds. Payment can also be made using a keypad and PIN. The wand can be "recharged" with money by the consumer in a variety of ways. At FreedomPay's web site, members can check their personal profile, view their account balance and past purchase history, and learn about promotional offers.

Partners In April 2001 fast food chain, McDonald's, announced a market-wide test of FreedomPay's RFID network in 29 of its restaurants in Boise, Idaho and the surrounding Treasure Valley area. This initial deployment is to serve as a real-world test market for FreedomPay and McDonald's. If successful, the programme will be evaluated for other markets during 2001 and 2002. And following launches of FreedomPay in its North Carolina and Connecticut facilities last year, vending company Canteen (a subsidiary of Compass Group North America) is progressively installing FreedomPay in 50,000 vending machines by the end of 2002. Along with the vending, cafeteria and quick service retail industries, FreedomPay will soon announce partners in the convenience store and petroleum industries.

Loyalty programme In November 2001 FreedomPay introduced a software package for loyalty marketing programmes. Loyalty Manager is a web-based system that allows merchants to manipulate purchasing data to create promotional programmes and emails targeted at specific segments of their customer base. It also allows merchants to communicate on a one-to-one basis with their customers. According to FreedomPay's president and co-founder, Bob Pons, this is a much more effective electronic version of the punch cards that so many cafeterias and coffee shops use as loyalty programmes.

New venues Now, with its purchase of ZebraPass, retailers will be able to run sophisticated target marketing and consumer loyalty programmes that are conducted automatically at the point of sale. In addition, the acquisition also expands the FreedomPay network into the sports and venue-based retail markets, where ZebraPass is well known. ZebraPass was started in Washington in August 1999.

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