Google To Buy Mobile Loyalty Card Startup Punchd
We've just gotten word that that Google plans on acquiring digital loyalty card service Punchd. The team, which consists of developers Reed Morse, Xander Pollock and Niket Desai (and formerly Grantland Chew), will most likely still …
Context & Ripple Effects
Google's move on Punchd lands two months after the company said it would unveil a mobile payments platform, and a digital loyalty card service is the kind of merchant-facing layer that sits naturally next to a wallet product. The deal is still reported rather than confirmed: TechCrunch says Google plans to buy the startup, and the claim that co-founders Reed Morse, Xander Pollock and Niket Desai would join Google remains unconfirmed as of this writing.
Punchd is a small team — three developers, per the report — replacing paper punch cards with a phone app, which makes this read less like a product acquisition than a talent-and-prototype pickup aimed squarely at the payments push. The same week's chatter about Google retiring the Picasa and Blogger brands is separate and also unconfirmed.
First-order effects
- If the deal closes, Punchd's three-person founding team joins Google, and its loyalty card technology becomes raw material for Google's merchant and payments offerings rather than a standalone service.
Second-order effects
- Merchants experimenting with digital loyalty programs gain a big-platform option, pressuring smaller loyalty-app vendors to differentiate or seek their own exits into payments suites.
Third-order effects
- If the pattern holds, consumer loyalty programs consolidate from standalone apps into features bundled by payment platforms, shifting the customer relationship toward whoever owns the wallet.
The trend: Mobile payments platforms are absorbing adjacent merchant services like loyalty, with startups exiting early into the hands of the companies building wallets.