Payment Gaming

Published @ mobilepaymentstoday.com

Mobile technology continues to be a game changer.  While the usefulness of the technology is obvious, what’s becoming a necessary component to increase adoption is the gamification of mobile technology. Through applications like FourSquare (R.I.P. Facebook Places), we’ve seen that a person’s geo-graph, as opposed to their social graph, holds value. With the integration of these graphs into mobile payments through initiatives by American Express and Dwolla, we may be on the verge of seeing the emergence of a new type of mobile gaming — payments gaming.

An example is Dwolla. Dwolla, a company based out of Des Moines, Iowa, is using technology and location to do some interesting things in this space. By charging 25 cents a transaction, Dwolla integrates your Facebook and Twitter accounts with your location to let you pay for things. Simple enough, but some say this company has “PayPal potential” in terms of disruption. What’s not to be dismissed is that they are an example of a convergence of gaming and money.

These guys are doing really well. Square reached $1 million a day in transactions in 10 months but Dwolla did it in seven months. They also bypass the credit and debit networks for payment by using the cash-based network, thus avoiding regulations and fees. By linking your bank account to a web-based application, Dwolla sidesteps the need to use a card or install a chip in your computer for NFC.

Their first introduction was “Spots” in March 2011. Spots is a technology that lets the user pay based on location – the geo-graph.  A simple example is walking to dinner in New York City on a summer Wednesday at 10:00 p.m. Not only would you like Italian but you’d like to taste some great burrata. (I suggest Mozza.) You can use Spots to determine what Italian restaurant is open and is accepting Dwolla payments. After choosing your destination, you’re given directions to the business and can pay through the app.

Recently, Dwolla came out with Proxi. (See the video here) Quite interesting because it builds onto Spots by incorporating the mobility of the user. Geo-graphic information on the way people pay?Huge. Creating pockets of payment where a “spot” would be the only area allowed for payment for a product? Secure.

Dwolla provides a technology platform that any business owner can take and integrate into their content or their experience in order to drive whatever particular behavior drives business value for them. Since gaming is very data-driven, imagine the possibilities that abound with the information on consumer payment and behavior that will come pouring in.

Applying new technology and APIs to the cash network, as opposed to the credit network, is what may revolutionize payments. Dwolla CEO Ben Milne believes that the cash network is an underserved market. He may be onto something.

It will be interesting to see the immense value this type of application holds. Gamification of payments will drive real business value because merchants can use rewards, motivation and competition to drive sales.  It will also help to break down barriers in the marketplace so merchants can start solving problems with immediate attention being paid to marketing and sales.

Games are designed to work around intrinsic motivators. Using badges or check-ins are great from a social lens but in the long term this leads to burnout. When you factor in money into the equation, a whole new set of rules are created that can be utilized to engage with people. To do this right you need companies that have deep experience in human psychology, motivation and game design such as Bunchball.

Critics are constantly clamoring that mobile payments isn’t really so transformative to warrant the hype nor the change in behavior. However, when online game design techniques can be used in non-game settings, i.e. the real world, then maybe people will take notice.

The gaming industry is a $50 billion industry that will go well beyond kids in the basement playing games. If evolutionary companies like Dwolla can authentically start to incorporate consumers into gaming behavior, the combination of gaming and mobile payments may explode.

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