At the Rochester, Ind., Dairy Queen, more than 350 customers can wave special stickers fixed to the backs of their cell phones at a scanner in the store, thereby banking loyalty points and qualifying for free cones and Blizzard sundaes. Customers have come back to the store more frequently as a result, helping sale rise more than 3 percent in the past year, says co-owner Dave Reasner. It’s something that’s working, he says.
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The radio frequency identification technology behind DQ’s loyalty cards, similar to warehouse inventory tracking systems, is starting to work on behalf of consumers at the cash register. Discover Financial Services, Citigroup, and Visa are introducing contactless payment technology that lets consumers pay for purchases by waving chips attached to their cell phones. Instead of swiping a credit or debit card, consumers can wave or tap phones — items that are nearly always handy — equipped with specially encoded stickers, or holsters, on receivers at the checkout counter.
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Card issuers also hope that handset makers will embed the RFID chips into phones, then create smartphone applications to help shoppers manage payments. Everything you store in a leather wallet will migrate to a mobile handset, says Barry McCarthy, a general manager at First Data, which processes transactions for 2,000 card issuers worldwide.
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This summer, Citigroup will start issuing contactless payment stickers to some customers, says managing director Liza Landsman. Later this year, some Discover Card customers will be able to wave or tap two-inch-square stickers glued to the backs of their iPhones at McDonald’s, 7-Eleven, and Home Depot stores. Discover Network, which issues the cards, plans first to test the technology with users of its iPhone app for viewing statements.
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On May 4, Visa and contactless device vendor DeviceFidelity briefly posted online — and then removed — a press release that said the…