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Facebook beds silent-bonking mobe coupon biz Tagtile

App-gobbling spree continues with NFC upstart

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While the world was watching the Instagram deal, Facebook was also buying up a rather more innovative startup which hopes to provide all the profitable bits of NFC without the fluff.

Tagtile, a small startup acquired by Facebook last week for an undisclosed sum, offers coupon-based loyalty schemes based on a mobile phone application and collected (and redeemed) by tapping the phone against an in-store terminal. But unlike NFC there's no radio connection between the two, and the terminal doesn't even need an internet connection; everything is accomplished through the magic of inaudible sound.

Tagtile does require each merchant to get a special cube, and find space for it on the counter, but the cube doesn't require an internet connection and is pretty cheap as it comprises only a speaker playing a merchant-specific sound outside the range of human hearing, but easily picked up by the smartphone application (iPhone/Android) which can use the identity for loyalty apps or token redemption.

Coupons are the flavour of the month right now. Groupon and its ilk have been busy splattering the internet with vouchers for all sorts of things, but merchants are discovering that while one-time offers might get people in the door, they don't build any kind of loyalty (except to Groupon). It's that disaffection upon which Tagtile, and now Facebook, hopes to capitalise.

But they aren't alone. Interactive tokens – or loyalty schemes as we used to call them – are a business from which the mobile operators intend to make money too. After giving up on trying to take a percentage of every transaction, the operators now hope to see loyalty apps paying for NFC infrastructure – and have set up various national consortia to enable that. Those schemes don't need special whistling in-store terminals either – they'll use the NFC terminals already being deployed to handle pay-by-bonk – but they will need NFC built into handsets.

Facebook's purchase of Tagtile is clearly an attempt to make some money out of its huge mobile footprint, something the social giant desperately needs to do, but counter space in shops is premium space, and no one is bigger in mobile than the operators with whom Facebook will now be competing.

Tagtile probably wasn't expensive to a company willing to chuck a billion dollars at Instagram, but Facebook will probably have to spend a similar amount to push Tagtile terminals into shops, and that may prove a more difficult thing to achieve. ®

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