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Cardify Simplifies the Annoying Store Loyalty Process

Loyalty cards are great for getting free cups of coffee at a local cafe and for merchants who want to drive repeat business. But does anyone actually enjoy carrying them around?

That’s one reason I’m so excited about the mobile wallet movement. Applications like Google (Nasdaq: GOOG) Wallet can process loyalty information automatically at the point of sale.

Of course, the problem is that Google Wallet relies on payment systems that can handle payments from NFC technology, which most stores don’t have at this time. Plus, only official Google Wallet partners can offer loyalty programs through the application.

But now a new startup, Cardify, hopes to change all that.

Cardify demonstrated its application on Tuesday at the TechCrunch Disrupt Conference in New York. And I’m convinced that it has more potential to reshape the space than any loyalty program I’ve seen yet.

You see, Cardify’s creators realized that current loyalty programs are a hassle – and not just because of the physical cards that you have to carry around.

Loyalty apps aren’t exactly effortless, either.

Take Foursquare, for example. The application allows you to check in at various establishments to earn free merchandise or food. Check in more than anyone else, and you become mayor.

It’s cute… and a bit more convenient than taking out a tattered loyalty card each visit. But it still requires action on the customer’s part.

With Cardify, all you have to do to collect loyalty points… is pay.

Here’s how it works.

Keeping Customers Loyal Has Never Been Easier

Once you have the Cardify app (available soon for the iPhone), you just enter your credit card numbers. Then, the application stores the information as a secure token on its servers, much like you’d see with an online retailer like Amazon (Nasdaq: AMZN).

When you make a purchase at a participating merchant using one of your stored credit cards, the app automatically processes the information and adds the points accordingly. No further action is required.

It’s easy for merchants, too, since there’s no extra equipment needed.

That alone puts the application ahead of other loyalty programs available today. And here are some more benefits to consider…

Redeeming Merchant-Specific Rewards: Once you know you’ve racked up a few points with Cardify (you get one point for every dollar you spend), you can log in to the app to see what rewards are available, or what rewards you can work toward down the road.

The examples Cardify’s founder, Sean Rad, gave at the conference were from a restaurant called Fig & Olive. They included 20% off your next bill, premium seating, or a VIP dinner with the chef.

Plus, since Cardify also allows merchants to track customer purchases, they can identify their top customers and offer them exclusive awards.

Merchants That Know Your Name: Most of us don’t live in a small town where every retailer you visit knows your name. But a bit more of a personal touch could go a long way in enticing new customers to return, or at least spread the word to friends.

And retailers signed up for Cardify will have immediate access to customer data as soon as they walk into a store. No check-in required. This information includes a picture, the customer’s social media status and how many points he or she has accumulated at the location.

Huge Tool for Retailers: With programs like Foursquare, retailers hand over points to customers just for walking into a store and checking in. Like Rad says, “A homeless person could be a mayor at Foursquare.” So it’s not easy to see how a program like that eventually drives future business.

However, Cardify merchants can see how much money participating customers are spending compared to customers not signed up for the loyalty program. That way, store owners can either encourage non-Cardify customers to sign up, or test new reward programs to get existing Cardify users more engaged.

NFC-Ready: Perhaps the biggest benefit of Cardify is that it can be built into new mobile payment systems. So not only is it able to capitalize on credit card purchases today, but it will also benefit in the future as NFC purchases via applications like Google Wallet and Isis gain popularity. In fact, TechCrunch’s Ingrid Lunden says that the “company is already in advanced talks with one of the big players in mobile payments.”

To top it off, Cardify has already partnered with CityGrid Media and UrbanSpoon, giving the company immediate access to half a million retailers worldwide. And it’s becoming the “exclusive rewards program for one of the largest franchises in the United States and internationally.”

That means it should hit the ground running once the application arrives in Apple’s (Nasdaq: AAPL) App Store in the near future.

Good investing,

Justin Fritz

Justin Fritz

, Executive Editor

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