Real-time coupons delivered through location based services (LBS) certainly have their place, but I can’t honestly fathom walking through a mall while my BlackBerry buzzes to let me know that The Gap wants me to visit or that it’s time to have a cup of coffee at Starbucks.  Like most, I like a good deal but my device already buzzes enough and I’m a fairly focused shopper.  It’s not something I would readily adopt - it’s intrusive and would likely get quite annoying.  That being said, we’re not at a stage yet where the technology can deliver the promise of location based couponing (as I’ve described above).  The application can’t run in the background on the iPhone and the GPS on my BlackBerry isn’t quite accurate enough, particularly indoors.

Tying your phone in with your cards (credit, debit or prepaid) and using the merchant location, as your geographic identifier, is conceptually a great idea.   There are hurdles with respect to capturing the transaction on authorization vs. settlement.   There are timing issues when identifying location based on transaction settlement – many retailers only settle transactions at the end of the day making it difficult to include relevance as part of the couponing experience.

That leaves us with authorization as the default method for precise real-time location identification (remember – based on merchant location).   The Networks (Visa, American Express and MasterCard) have a lock on this market because they authorize the transaction.   Given that they are all publically traded entities and looking for new ways to generate revenue, it is likely that they will move outside of their existing customer bases (card Issuers), but that is going to take some time.   It’s an untraditional model for them.

If I were a betting man (which I guess by virtue of being in this business, I am) – I would think the value comes from creating a network of merchants.   I’d love to have a set of coupons and reminders that could help me manage my shopping experience a little better – but not delivered in real time based on my location; rather, delivered at a meaningful time while I’m planning what I want to do.   I’d love to tell my phone what I want to do in the morning and have it help me optimize my day (from a time and money perspective).

·       Start at Starbucks down the street from your house (don’t forget they give you free flavour shots and wi-fi if you use you prepaid card)

·       Hit the grocery store (don’t forget that strawberries are on sale at Store 1 and blackberries at Store 2)

·       Go for a bike ride (don’t forget 2 lanes are closed on Yonge St. so use an alternate route)

It’s pretty clear … I need all the help I can get!