Another on-demand transport app is making a move into payments to expand the existing relationship with its customers (and subsequent margins that it makes from serving them). Bird today announced the launch of Bird Pay, a service that will let people use its app to purchase items from local participating businesses alongside renting scooters. The service is being tested first in Los Angeles and Santa Monica, the company said.
Bird Pay will work by way of a QR code, which can be read via your app at the point of sale at participating businesses to make cashless purchases. (After scanning the code, you enter the amount you are charging and swipe up to complete the purchase.)
The company said that Bird Pay was created directly in response to requests from businesses themselves — who will be using the app to promote deals near to where Bird users pick up or drop off scooters. The link between local businesses and scooter rides is a strong one: Bird says it found that 58% of all the rides through its app start or end at a local business, and claims that businesses in all of its areas of operation — it’s now live in some 100 cities — say that the presence of Bird scooters outside their establishments have increased footfall.
“An early insight that emerged shortly after introducing Bird in Santa Monica was that it had the potential to not only allow people to avoid the chore of circling a block to find parking resulting in congestion and frustration, but it could also foster a more direct connection between people and local businesses,” said Travis VanderZanden, CEO and founder, Bird, in a statement. “Store owners in the community often tell me, ‘Birds outside bring business inside.’ This phenomenon paired with our commitment to community resulted in Bird Pay which helps drive even more customers to local businesses.”
Adding in payments to on-demand transport apps has become something of a tested and successful formula. In Asia, companies like Grab have built rather extensive payments operations on top of their transportation apps — businesses big enough to be raising hundreds of millions of dollars in their own right to expand. And several months ago, Uber also started to test the waters in this area with the launch of Uber Money.
Of course, services like Grab’s have a slightly bigger greenfield when it comes to winning business: in many of the regions where Grab operates, cash is often still king; therefore, having a relationship with a user, where a mobile app is already being identified with “virtual money” (with money either being preloaded into an app or linked to a payment card), gives the app publisher an easy opening to expanding that relationship, such as payments for local goods and services.
The challenge in the U.S., where Bird is based and operates primarily, is somewhat different: people are already used to plastic cards, and their phones may already have one or more payments apps active already. Both Apple Pay and Google’s Android-based offering have had strong take-up, as have alternatives from Samsung, PayPal and many others. That means a much more crowded playing field for Bird or any other new entrant.
On the other hand, we are creatures of convenience, and if we already have the Bird app open to open or close off a ride, that could just be the lower friction we need to use it to buy something. Time will tell if this particular bird will, indeed, fly.
Bird last October raised some $275 million at a $2.5 billion valuation.