#SFSW12: Next-Gen Loyalty — Mobile Payments vs. Credit Cards

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Traditional paper punchcards are on their way toward extinction, but leaders from top loyalty companies weren’t in complete agreement over which platforms are best positioned to capitalize on the changing tide during a morning panel discussion at Street Fight Summit West on Tuesday. At the panel, moderated by TechCrunch writer Anthony Ha, LevelUp VP of Local John Valentine; LocalBonus CEO Derek Webster; and Swipely CEO Angus Davis differed in their opinion on whether credit cards would continue to dominate in the world of retail transactions.

“Mobile payments are the way of the future, because everyone has got their phone in their hand,” explained Valentine. Webster and Davis weren’t so sure. Both said that attempting to change consumer behavior would be a losing proposition. “From my perspective, it is not broken to pay with a plastic credit card,” Davis said. Webster also noted that credit cards are more ubiquitous than smartphones for the everyday consumer.

The panelists also discussed the challenges of launching a loyalty program in today’s market. “Merchant acquisition is not completely easy, just to be blatantly honest,” Valentine said. To combat these challenges, Valentine’s has deployed a street team at LevelUp to work with merchants on a one-on-one basis. “We’ve got 50 to 60 people on the street every day talking to merchants about LevelUp,” Valentine said.

Davis agreed with Valentine on the importance of having a sales force in place, and said Swipely has also found success by providing value to merchants before they have a single consumer signed up. That value, explained Davis, comes in the form of analytics, which provide merchants with insight into their customers’ behavior based on credit card activity. “The challenge there is to provide enough value to the merchant out of the gate is you can justify [the expense],” Davis said. “We are providing a high degree of value to justify the expense.”

Stephanie Miles is an associate editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.