Foursquare and American Express Get Together - Click here for full article http://bit.ly/i3023K

Foursquare users will now get a boost to their check outs when they check in with their mobile apps. American Express is teaming with the location based service to offer discounts to Foursquare users. Subscribers to Foursquare can gain points and badges when they visit certain places with their GPS – enabled phones and other mobile devices. The partnership will begin with a trial of about 60 retailers in the Austin, TX area with plans to roll out nationwide.

For American Express card holders, they must pre register their cards with the service before they start receiving offers. The partnership is part of the future of mobile payments; customers paying for their purchases with their mobile phone. American Express partner merchants may be able to use the service to create targeted offers to their customers. Eventually, the service may eliminate the need to preregister, saving time for both retailers and customers.

Foursquare is looking for ways to monetize its popular service. Users check in through the mobile application at different locations. Frequent visitors can become “mayors” of different locations. The service started in 2009 and had over 6 million registered users as of January 2011. While largely pioneering the location based check in system, it now faces challenges from competitors like Gowalla and Facebook Places. The latter presents a unique problem due to its large user base and brand identity. By linking themselves to the purchase, Foursquare can become a additional layer to credit card transactions.

The initial trial will consist of “Spend $5, Save $5”-discounts at the “Southwest Interactive Festival”, a convention for technology start up businesses. Retailers can also push offers out to customers through their mobile devices. The increased access to customers is obvious, but checking-in by card alone is not in the plans yet. Users will still need to check in through the Foursquare app before they receive the offer.

Small businesses should benefit significantly from the partnership. The lure of collecting Foursquare badges and mayor titles can increase foot traffic by an observable amount. Targeted discounts, such as combination discounts that register after a customer has checked in at two or more locations, can increase the purchases of current customers. Potential customers can be alerted to deals once they check in, increasing their tendency to purchase at the location.

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