SnapTags: The New Player in Mobile Payment Processing

As QR Codes slowly gain traction in North America, their reach is being threatened by a new sleek and sexy form of image codes known as SnapTags. These new displays allow for companies to create scannable images with their logos prominently featured that facilitate communication between advertisers and consumers, and as of last month, even trigger payment mechanisms.

QR Code technology, which was created by a subsidiary of Toyota in 1994, had a long road to application from factories and into the toolbox of marketers. Enthusiasts will cite the fervent use of QR Codes in Japan as a testament to their undeniable future application worldwide, but the fact of the matter is QR Code excitement has become relatively stagnant in America over the last couple years. Unfortunately for these black and white squares, they have an Achilles ’ heel — only 1/3 of Americans have smartphones capable of installing QR Code reading Apps, limiting both their scope and potential.

Conversely, a major advantage SnapTags possess over the clunky matrix bar codes is that they can be processed by any phone with a built-in camera, allowing retrieval of the information through either the SnapTags App or via SMS. As such, SnapTags have recently caught the attention of major advertisers, boasting relationships with Coke Zero, Wrigley’s, Office Depot and even the U.S. Marine Corps, to name a few.

“Brands, retailers, virtually any business that wants to communicate with consumers can use SnapTags,” Nicole Skogg, founder of SpyderLynk and creator of SpapTags, told CreditCardProcessing.net in an exclusive interview.

Though scalability can be achieved in both technologies, the aesthetic advantage possessed by SnapTags is what might likely deal the final death-blow to QR Codes, which seem cumbersome in comparison.

In September, Social SnapTags were launched in Glamour Magazine, which allowed consumers to follow and like brands on Twitter and Facebook by scanning SnapTags spread throughout the pages of the publication. The campaign was considered a huge success, having engaged over half a million users, generating tens of thousands of Facebook likes and captured the attention and imagination of future advertisers.

Snap-to-Buy on the Horizon

Nearly all of the conveniences provided by QR Codes are provided in SnapTags as well, but it’s the launch of their newest product, Snap-to-Buy, that’s really piquing the interest of the mobile payment processing industry.

Snap-to-Buy SnapTags launched last month in the newest issue of Glamour which integrated the ability to purchase a product from the magazine by merely scanning the SnapTag and entering the required information only once, after which the information is stored within their mobile wallet, ready to be used for other desired transactions at any time. As far as brick and mortar implementation is concerned, SpyderLynk sees itself as an important part of future product and sales promotions.

“Today, SnapTags are great for enabling promotions in or out of the store. The new Snap-to-Buy functionality creates a shopping experience directly from offline and most likely out of the store media,” Skogg said. “Since they are iconic, consumers see them and see that they know what the opportunity is that’s being presented.”

Addressing Privacy and Security Concerns

No matter how convenient or exciting any technology becomes, there will always be skeptics and detractors raising privacy or security concerns. SpyderLynk aims to quell those concerns by assuring consumers that they won’t be sent push messages unless they opt in and that users’ credit card information is stored safely within their mobile wallet.

“Once a mobile transaction is completed through the technology platform, all disputes, resolutions, etc. are handled in the same way as any other traditional credit card transaction…” Skogg assured. “There are no fees charged to the consumer.”

And the Future Belongs to?

At a time when the discussion over whether the future of mobile payments belongs to QR codes or Near Field Communication is hotly debated, proclaiming a winner now would be rather premature. The future will likely belong to the product that is most willing to adapt to advertisers’ needs, while proving they can continually engage users with creative and memorable campaigns. And if a company can bridge the gap between the two and create a cohesive opportunity, then the technology’s application could reach beyond anyone’s expectations.

“We don’t really see NFC as a competitive technology as much as we see an opportunity for SnapTags and NFC to work hand in hand. SnapTags can activate opportunities for coupons, information – while near field can be used to process the payment,” Skogg said. “So, the consumer snaps to get the offer, it is loaded to their embedded mobile wallet and then they can redeem the offer at checkout using that mobile wallet by swiping their phone at checkout. The offer would automatically be deducted and tracked.”

Consumers of the future will most likely adapt and be just as comfortable with carrying around their phone as a financial instrument as they are with carrying around a wallet stuffed with credit cards, cash and their identification.

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Posted on Tuesday, March 13th, 2012