Dunkin’ Donuts’ recently released a new mobile payment app that allows you to set up an account and pay by scanning an on-screen barcode at the checkout counter.
You can add money to your account by providing the app your credit card information, and you can also send gift cards to friends.
Starbucks also has an app that tracks your purchases and rewards frequent buyers with free drinks.
But as Wired’s Marcus Wohlsen points out, such apps are really designed for the benefit of retailers themselves, who for the first time can advertise to customers via the same technology those customers are using to pay.
“Stores can tighten this retail feedback loop even further by creating a record of a single customer’s purchases in perfect detail, and even by tracking a customer’s physical location to send them an ad or a deal when they get close to the front door,” writes Wohlsen.
More than a dozen big merchants who call themselves Merchant Customer Exchange, or MCX, have announced plans to jointly develop a mobile-payments network that will battle similar services from Google Inc. and other companies.
According to The Wall Street Journal, Wal-Mart Stores Inc., Target Corp., 7-Eleven Inc. and Sunoco Inc. are among the companies hoping to infiltrate the sprouting market that converts smartphones into devices for making purchases.
Square Inc. is an electronic payment service that allows users in the United States to accept credit cards through their mobile phones, either by swiping the card on the Square device or by manually entering the details on the phone.
Now Square has a creepy option which lets merchants charge your account simply by matching you to a picture of your face that pops up at the register when you walk in the store.
When I think about the information consumers are causally relinquishing to third parties via a smartphone for say, a cup of coffee, my skin crawls.
Smartphones store your personal contacts, reveal your GPS location, your credit card information, and link you to a list of all your credit card purchases, and much more.
Wohlsen suggests big companies like Walmart and Target will eventually entice their customers to pay via a mobile app so they can get access to the trove of personal data that the technology makes available.
He adds that these companies may even build their own platform because it will ultimately cost them less than outsourcing the payment process.
“A savings they could use to make a Faustian bargain with customers: Pay with mobile, save a few cents. The only thing you have to give us in return is your digital soul.”