As device makers like RIM, Samsung and Nokia incorporate NFC technology into their mobile devices, Apple has been radio silent on what its plans will be in mobile commerce and payments. But a deal that is getting announced today could be a clue to one area where Apple might see a big opportunity.
Apple has signed on with Pirq, a startup from Seattle, to offer food and drink daily deals to its employees in the Bay Area, with the service working by way of an iPhone app, location-based technology, and a Microsoft Tag code to redeem the discounts. A source tells TechCrunch that this is the first part of a potential “four phase” implementation that could see Apple offering a deals service out to all iPhone users.
The deal with Apple being announced today will see discounts of between 20 percent and 50 percent at nearly 50 venues in Cupertino, Santa Clara, Sunnyvale and Mountain View, and it is Pirq’s jumping-off point for offering a wider service in San Francisco further down the line — within the next 12 months, according to Pirq. To date, the company’s service has only been available in Seattle, where it launched in September 2011.
Pirq’s deal with Apple is partly the result of an existing relationship that both companies have with Passport Unlimited, which has been working with Apple for the past six years offering eating discounts to its employees. Pirq’s chairman, Roger Blier, is the founder and CEO of Passport Unlimited.
Although Pirq was getting ready to announce this news itself today, we actually heard about it first from a tipster at Apple, who got in touch, enthusiastically, to say how great the service was.
As the tipster pointed out, the difference between what Pirq does and what, say, Groupon offers is that Pirq pre-sets the discounts with restaurants and doesn’t require users to pay for the service upfront before redeeming it.
“I just think it’s really cool that our family gets deals like 50% without ever having to buy them like Groupon,” the anonymous tipster noted to me. (A screen shot of how the Apple offering looks is the illustration for this post.)
The app lets users find deals near their current location, and then reserve a deal with no pre-payment needed. Pirq says it’s able to bypass pre-payment because of a bit of proprietary technology that lets restaurants adjust deal offerings in real-time based on peak and off-peak hours for better “yield management”.
The ‘second course’. Offering deals to Apple employees sounds like it could be the tip of the iceberg, if the service proves successful in its initial phase.
Another source we contacted described the deal with Pirq as part of a “four phase” rollout. Again, assuming all progresses as planned, the intention is to offer the service in a progression of circles: “First the Apple community, then the blogger community, then the community of users who get notices of Apple products early, and then finally the wider community of iPhone users.”
It’s not clear yet whether that would mean a pre-loaded app with pre-determined offers especially for iPhone users, or simply a matter of promoting the app a bit on the App Store.
Apple has declined to comment for this story, and James Sun, the CEO of Pirq, also would not comment on how its relationship with Apple would develop. But he did note something else that makes the possibility of this service as a commerce play by Apple even more interesting: longer term Pirq will add monetary transactions into the app — in addition to coupon redemption.
“We will be doing payment on the phone using coupons,” he said. “We can easily do this now but vendors are not that comfortable with it.” He said that this is because most restaurants want to “see” the transaction to make sure that it’s actually going through to their systems. Sun calls point-of-sale systems “the Golden Goose Egg” of mobile payments.
Apple, of course, could have a very interesting role to play in transactions because it already has payment details for so many of its iPhone users, courtesy of the App Store.
That connection is not one that has been explored yet by the company, but potentially you can see how it could be linked into a service like Pirq’s to automatically pay for a meal or drink using your Apple ID, much as you do now to buy an app or a music track.
Regardless of whether or when Apple incorporates NFC into the mix, there’s a chance that users might eat up such as service if it ever came to pass.