Earlier this month, mobile advertising company Placecast hit 10 million active users on its ShopAlerts platform — a white-label service that helps advertisers like North Face and AT&T push geo-targeted offers to consumers who opt in. Now, the six-year-old company is expanding into the mobile wallet space with the launch of ShopAlerts Wallet this morning.
The service brings much of the company’s existing technology — namely, location- and context-based offer targeting — to a re-skinable HTML5 app and set of APIs that allow companies with existing payment processing capabilities to create transaction-linked loyalty and offer programs. The company is keeping its hands clean of managing the payments themselves, but the service can plug into any payment processor supporting credit cards, NFC or carrier billing. (The service is also available without payment integration for companies without a payment instrument, and can tie into other form of POS redemption.)
The decision to steer clear of the transaction process was more a function of value than it was of risk, Alistair Goodman, CEO of Placecast, told Street Fight in an interview yesterday: “If you look at the payment space broadly, it’s about a 100 billion dollar opportunity — but it’s a space that’s very efficient,” Goodman said. “The opportunity for the wallet is much larger, upwards of $400 billion, and it’s going to come in terms of the value-added services — offers, loyalty programs, advertising and marketing — that drive consumers to use that wallet. What we’re seeing now is recognition that that’s a bigger piece of a pie than the actual transaction piece itself.”
At launch, the company is gearing the product towards mobile operators and larger brands as well as credit card issuers looking to drive transaction on their existing platforms. Mobile operators have been quite active in the mobile payments space already with the AT&T, T-Mobile and Verizon-backed ISIS set to come to market in late 2012.
It’s unclear which features the mobile wallet plays will want to build internally, but with the space on fire before products have even come to market, you can bet that many companies will be looking to improve targeting and relevancy on their platforms. Placecast’s geofencing technology is fairly defensible largely because it pulls location from the carrier rather than the phone, avoiding the battery drain that has become a major impediment for location-based services.
The lingering question mark in this space is Apple, which moved closer to a mobile wallet offering earlier this month with the release of Passbook. Although the app does not process payments, it provides a location-aware platform for loyalty and marketing services, which the company could quickly turn into a full-fledged wallet on the back of its 400 million plus credit card-connected iTunes accounts.
APIs thrive on fragmentation and while an Apple wallet remains only speculation, the quick success of a single player could winnow out the field and in turn, the market for Placecast’s product. In the meantime, the mobile commerce space looks to be a smart channel for Placecast to generate new revenues for its targeting technologies.
Steven Jacobs is Street Fight’s deputy editor.