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Mobile coupon system updates customers' Facebook accounts

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A new marketing service has launched at Los Angeles' LA Live entertainment complex that enables merchants to post messages automatically to their customers' Facebook accounts.

The system uses an emerging technology called near field communication (NFC) that combines mobile phones with contactless card technology to enable consumers to store virtual versions of their plastic cards in their phones. They can then make payments, receive coupons or discounts and perform other transactions by simply placing their phone within 10cm of a contactless card accepting point-of-sale terminal, a 'smart poster' containing an RFID tag or a public transport access point such as a London Underground barrier. NFC enabled phones are expected to begin shipping in volume next year.

Merchants participating in the system at LA Live place a smart poster containing an RFID tag at the entrance to their store, restaurant or entertainment venue. Consumers then simply tap the poster with an NFC phone, or with an NFC device that attaches to their existing phone, when they enter the merchant's premises. A coupon is then automatically delivered to their phone and, at the same time, their Facebook status is updated with a message such as "Ryan Bethea is enjoying a special offer at Trader Vic's @ LA Live".

Whilst consumers need to have a special phone or device in order to use the system, merchants do not need any additional equipment beyond the posters, which are provided by the system's developer, Tranzfinity.

Once the consumer has received their coupon, they can display it on the screen of their mobile phone and then simply show the coupon at the point-of-sale in order to redeem it. Tranzfinity then charges the merchant a fee for each time a customer downloads a coupon plus a smaller fee for redemption.

"This is an excellent way to look at how we can start to participate in social networking and interact with our customers and their friends," says John Valencia of Trader Vic's, one of the merchants participating in the LA Live system. "You can't underestimate the power of having a customer pass along a positive experience at your restaurant."

The system runs on Tranzfinity's Secure-Z ETSM platform, which allows retailers to vary the offer made according to a number of parameters such as the time of day. The system running at LA Live is managed directly by Tranzfinity but the company's main business is in developing its Secure-Z platform as a white label product that can be licensed for use by other companies looking to offer next generation mobile marketing solutions.

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