Imagine you’re walking by your local cafe, and you get a notification on your phone that you’ll get a free bagel if you buy a cup of coffee. You walk inside, and make the purchase with your credit card — no need to take out your phone again. The bagel rings up as “free,” and you get a notification from your bank confirming you’ve received the discount.
All of this payments and loyalty interchange can happen over the cloud. A lot of companies are trying to get their arms around mobile payments. Many of them, trying to make your phone itself act as the credit card. Google with Wallet, Square, PayPal, American Express, everybody who’s experimenting with NFC.
Here’s a bit more about this vision, which Green Dot chief executive Steve Streit and new SVP and Loopt founder Sam Altman laid out to me today.
First of all, many Silicon Valley readers might not even really know what Green Dot does. TechCrunch has only talked about them a little bit, like in this big post Michael did in 2010 after the Monrovia, Calif.-based startup had a giant initial public offering. Basically, the company provides those pre-paid cards you see at supermarkets and other retailers. Teens and people with poor credit can buy them ahead of time, then spend through a month without being worried about incurring overages and fees like they might with credit cards. The cards, sold in conjunction with Visa, Mastercard and other credit card and payment service providers, are available in 59,000 locations around the country.
So, Green Dot has relationships with businesses large and small. And it’s a bank, regulated by the federal government, and has call centers, a payments processing infrastructure, and all the other components of handling lots of transactions.
But those cards it has in stores today are not the end game. Streit, like top entrepreneurs and investors around Silicon Valley, believes that everything in the future will come through the device you hold in your hand.
This is where Loopt comes in. The formative location startup has been working towards offering mobile deals and other offers to its users over the years, combining information about the user and where they go to match them up with retailers. It has also built a collection of patents in this area.
A business with a local presence, in other words, could work through a Green Dot/Loopt merchant service to stick a deal in, that a user with the app installed would see when they walked by.
Altman and his team are going to become the Silicon Valley outpost of the LA-area company. He’ll be the senior vice president of interactive, and the new division will be building the types of mobile applications that you’ll soon be using to get that free bagel with your coffee.
[Image via Flickr/scaredy_kat]