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Visa USA will test text messages as a way to deliver coupons and discounts to employees at its corporate campus in Foster City. The 12-week test, which does not involve payment technology, is a precursor to broader tests of text messaging that may be linked to payments. The test with 500 employees will begin before Nov. 30 and involve coupons or reward notices sent in the form of secure text messages to the employees' cell phones, Blackberries, or similar personal digital assistant (PDA) devices. The electronic coupons will be redeemable for discounts such as $1 off a cup of coffee or specials on purchases at cafeterias and cafes throughout the office complex. “We're testing a variety of different types; the information will say what the offer is for, where, and how long,” says Michele Janes, Visa director of product innovation. Specifically, the messages will come in three forms. Some will be straight text that includes a code the employee will show to the cashier, who will punch it into the register to bring up the discounted price. Other messages will be a “somewhat jazzier version” of the text messages and include graphics with similar codes, says Janes. Still others will have bar codes that the cashier will scan to implement the discount. Users will pay just as they would otherwise, with cash or cards. It's little wonder Visa and other payments firms are interested in text messages, which are especially popular with young adults, and the payments possibilities of cell phones. There are 225 million cell-phone users in the U.S., according to Visa. Users sent 12.5 billion text messages in June alone, according to data from the Cellular Telecommunications and Internet Association (CTIA). The limited Visa test is a forerunner to broader tests over the next 12 to 18 months that will involve Visa members and merchants, according to Janes, though she wouldn't divulge details. Last May, Visa completed a test of contactless payments using near-field communication (NFC) technology that enabled 150 users of special Nokia cell phones loaded with JPMorgan Chase & Co. Visa accounts to make purchases in Atlanta's Philips Arena. “What we learned in Atlanta is users like to use their phones for payment, but like to use their phones for information as well,” says Janes. “Certainly down the road we absolutely envision marrying the two.” The Atlanta test generally drew positive reviews (Digital Transactions News, Sept. 8), though some payments executives say widespread implementation of the technology used for that pilot would require mass issuance of new, payments-capable cell phones.
