Mocapay Inc. on June 10 announced a partnership with point-of-sale equipment reseller Postec Inc. that will enable merchants to support both mobile payments and mobile promotions.

The Denver-based loyalty and gift card technology company in March unveiled a platform that enables merchants to give customers a one-time authorization code to conduct purchases from prepaid accounts using mobile handsets (see story).  

Atlanta-based Postec resells Micro Systems Inc. payment systems, which integrate with Mocapay's service, Doug Hurst, Mocapay vice president of products and partnerships, tells PaymentsSource. The integration allows merchants to keep existing point-of-sales systems and gift and loyalty programs because everything becomes automated, Hurst says.

Merchants benefit from the integration because they can send consumers promotional messages and coupons nationally, locally or for a specific store via text message with the goal of increasing overall sales, Hurst says.

The ability to send virtual gift cards and coupons is gaining in importance because "traditional media doesn't work for the next segment [of consumers], who are teenagers and in the 18- to 34-year-old group," Hurst says.

Because so many consumers always have their mobile phones with them, turning the phones into mobile wallets may prompt them to make purchases they otherwise would not make, he adds.

Additionally, consumers who use Mocapay's service can use their mobile phones to find the nearest participating retail location, pay for purchases, view transaction histories, check account balances and reload gift cards. Consumers also can send digital gift cards to friends and family from Mocapay’s or a participating merchant's website, Hurst says.

Mocapay's service is free to consumers. Merchants pay a set-up and monthly fee plus the cost of the Micros equipment. Mocapay declined to disclose the cost of the service and the equipment.

Sending mobile coupons is a cost-saving method for merchants, but it will not generate much market traction overnight, Ron Shevlin, a senior analyst with Boston-based Aite Group, tells PaymentsSource. A migration to both mobile payments and mobile coupons will take a few years because "even though Baby Boomers have a mobile device, they aren't necessarily interested in changing their payment behaviors," he says.

But Shevlin agrees that younger consumers should be the main target audience for such a product. "Generation Y does not like to carry around cash," he notes. "They want to make their mobile device into something more than just a way to make phone calls."

The mobile-payments market will continue to evolve, Shevlin says. And over time, "there will be adoption by a lot of different technology companies and merchants as all the pieces come together," he says.

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