Zumogo, ProPay Inc.'s new social media payment tool for mobile phones, tries to go beyond the confines of conventional mobile payment applications.
Once launched, the Zumogo app searches for participating merchants within a radius chosen by the consumer, much as many mobile banking apps help people find branches or automated teller machines.
Local merchants then can send in-app messages about coupons and other sales incentives to entice participants to shop in their stores.
The value for merchants is the ability to communicate with prospective customers, advertise specials and, in the case of restaurants, potentially increase the rate of turnover at tables, said Chris Mark, ProPay's executive vice president of data security and compliance.
The app is designed to help merchants increase their revenue potential, he said.
ProPay picked restaurants as the first merchant category for the app because choosing a place to eat is a social experience for many people, who also tend to respond to dining incentives, he said.
"The consumer initiates the discussion with merchants," Mark said. "The consumer has the opt-in, opt-out control."
Zumogo is designed to be highly secure, in that it stores no payment data on the handset.
By not storing payment card numbers in the Zumogo app loaded into Apple Inc. iPhones, the independent sales organization sidesteps the potential risk of information being exposed if a phone loaded with the app is lost or stolen, he said.
"If it's not on the phone, it can't be stolen," Mark said.
ProPay, a Lehi, Utah, technology company, released Zumogo on Feb. 3.
The app also is available for phones using Google Inc.'s Android operating system, and ProPay said it will release a version for phones using Microsoft Corp.'s Windows 7 by March 31.
Zumogo customers' payment data is stored on a secure ProPay server, not the phone, Mark said.
"There are a number of [product offerings] where the data is stored on the phone, secured by an app," Mark said. "We feel removing the data is the best advice."
ProPay also can make money from consumer use of the Zumogo app and is evaluating pricing models, he said.
One would be to charge merchants a small monthly fee for the ability to advertise Zumogo acceptance, and a processing fee, he said, but he declined to divulge additional details.
Merchants need not switch to ProPay for their payment processing to accept Zumogo transactions, Mark said.
