Customer-centric mobile commerce platform

Prior to forming CardFree, members of the San Francisco-based firm spearheaded the Starbucks card mobile initiative and have since implemented similar programs for Dunkin' Donuts, Taco Bell, Sonic, Checkers and other quick service restaurants (QSRs) Founded in 2012 with the financial backing of entrepreneur turned investor Jeffrey Katz, CardFree has engineered a complete end-to-end mobile commerce platform.

"We built our own CRM platform, our own loyalty system, our own stored-value system, and this way we can actually get a wallet up and running a lot cheaper, with a lot more control for clients," Katz said during an Electronic Funds Transfer Association meeting in late 2015. He pointed out that some clients prefer to integrate the entire package, and others prefer a la carte integrations with third-party providers.

"We work with their creative teams, with their outsource teams, and it's all about creating a user experience that aligns with what they're trying to do in the digital marketing space that fits their brand," Katz said. "What we have is a closed-loop wallet that these brands control."

Integrated stored value

CardFree stated that its stored-value offering is different than most gift card programs, which are generally limited to cash value. Its patented system can manage multiple types of stored value – loyalty points, offers, rewards and coupons – through a single interface, instead of requiring merchants to run multiple scans in separate interfaces for each stored value.

"What our stored value system does is when you go to take the action, whether that's scanning a QR code or NFC or cog or whatever it is, we check at the master account level to see whether you have value that we can decrement against the purchase," said Alan Paul, Analyst & Strategy Lead at CardFree. Consumers can set up a master account for each merchant.

Because the platform is technology-agnostic, it supports Apple Pay, Android Pay, Samsung Pay, PayPal and other payment options. "On the technology side, whether it's a QR code, NFC, cloud payment, short code, we support all of them for our clients today," Paul noted.

On the horizon

In addition to having a historical connection with QSRs, another reason CardFree approached this sector as a startup was its receptivity to mobile commerce investment, Paul said. CardFree plans to branch into other retail categories including the convenience store, gas station, grocery store and small merchant segments.

Paul believes CardFree is a good match for c-stores, where customer habits and food offerings are very similar to QSRs. "We'll try to focus as much as we can on the in-store experience because that's where the margins are and where you can drive loyalty incrementally," Paul said, noting that this is less true on the petroleum side of c-stores.

As the company continues to expand, its focus remains the same. "What's really important is that it's a great experience for the consumer," Katz said. "The Holy Grail when making an appropriate offer is to know who you're selling to, when they're buying, where they are. The more that information – with their permission – is used for the right purposes, the better and more precise we can make a digital offer."

Another way CardFree is improving the brand experience is through its order-ahead platform. For QSRs, where timing is everything, preparing orders too far in advance can result in soggy or cold food. When an order is placed through CardFree, beacon or GPS technology picks up when the customer is within close proximity.

"At that point the handset fires off the order to the POS and we authorize the payment, so that their Taco Bell burrito is warm when they walk in the door a minute later," Paul said. Clients also use the proximity technology to prompt repeat orders from frequent visitors. CardFree doesn't have a formal channel program, but the company does work with ISOs and merchants to develop suitable integrations.

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