The social discounts space seems to be getting more crowded by the day — and now financial giants Visa and Mastercard have come to the party after a payment provider’s deal with location-based social network Foursquare.
The expansion of the existing arrangement Foursquare has with First Data and CardSpring, which allows users to sync their account with their American Express cards, allows users to link their Mastercard or Visa debit and credit cards with their Foursquare account and benefit from special discounts from selected retailers. Users just have to check into a participating location (like one of 6 500 Burger Kings in the US), swipe their linked card when paying and the discount will be credited to their account.
AdAge suggests that some chains who will be offering discount include Whole Foods, Nike, Sports Authority and Dunkin’ Donuts, although the potential is much greater, as the functionality rolls out to more First Data merchants using its OfferWise service in the future. According to First Data, businesses will also be able to push alerts about relevant ecoupons and specials to Foursquare users when they’re in the area. Over 1-million shops, clubs and restaurants have claimed their businesses on Foursquare to date.
It’s a similar deal to the one American Express recently brokered with Twitter, that allows customers to sync their cards with their mobile app and qualify for discounts and special promotions in return for tweeting a special hashtag.
Like Twitter’s Amex partnership (where the social network wouldn’t confirm how it’s getting a cut of the sales), it seems that Foursquare is largely keeping quiet on exactly how it plans to profit from the venture, except to say that it will. Speaking to AdAge, Foursquare’s product manager Noah Weiss confirmed that the company would now be making money from the purchases its users make using their Mastercard, Visa or Amex cards, saying it would be a “pretty core part of our revenue model going forward.” He declined to specify if the startup would be taking a percentage of each sale or charging the three companies a flat fee for offering the service.
With a user base topping 30-million, Foursquare has been experimenting with different ways to generate revenue from billions of check-ins worldwide. In addition to the Amex partnership, the company took a step into advertising last year when it launched promoted updates to allow businesses to pay to have their locations featured in the app’s Explore tab. The merchants pay each time a user checks into their business, unlocks a special, or otherwise actively engages with the update.