Alliance Data Systems Corp.  is adding augmented reality technology to the tools it offers to drive the use of retail payment cards.

Augmented reality refers to the use of computer data superimposed on a view of the physical world. For example, PNC Bank's ATM locator app draws a compass over video from the phone's camera, creating an augmented-reality view that directs users to the nearest ATM. Google Glass, the wearable device Google is testing, performs a similar function by displaying information in the user's field of vision.

"In mobile commerce, it's not just about the payment," says Arkady Fridman, a senior analyst at Aite Group. "Imaging being able to do not just a price comparison, but see the item in action in a video. Or a shopper can see his or her own face on an item. It's a much more personalized experience."

In a retail store, consumers could hold a smartphone near a product, or near a product's signage, to call up extra information about the item.

"We want to make sure we're communicating with customers at the right time and meeting their preference," says Mary Evans, vice president of client sales at Alliance Data Retail Services.

Alliance Data plans to deploy augmented reality this year as part of its suite of systems for managing data and handling payments and loyalty. Evans did not go into detail on how Alliance Data will implement the technology, but said it could be used across channels — online, mobile and in-store — in conjunction with a merchant's loyalty program and co-branded payment cards.

The technology could also use the phone's GPS and other information to detect customers when they visit a store.

"Consumers like it when we speak to them when they are entering a store and we let them know something is going on with a product that they are interested in," Evans says.

Alliance Data offers loyalty marketing and analytics to clients through subsidiaries such as Alliance Data Retail Services, Epsilon and Loyalty One.  The company's clients include Pier One, J Crew, Eddie Bauer and Zale Corp., which recently contracted with Alliance Data Retail Services for a private-label card for Zales Jewelers, Zales Outlet, Gordon's Jewelers and Piercing Pagoda.

Zale did not make an executive available for an interview, though Evans says Alliance Data is hopeful that the jewelry seller will use its new marketing technology.

Jewelers are good fit for emerging payments and marketing technology, says Brian Riley, a research director at CEB TowerGroup. "Jewelers get a lot of data on consumers when they come into a store, including life-stage information such as weddings and other events," Riley says.

Augmented reality is relatively new for financial institutions and payment companies, though it has shown promise for marketing and other customer services. 

Among payments companies, LevelUp, shopkick and ZooZ have explored using Google Glass to tie marketing to payments; and Google may use Google Glass to drive adoption of its mobile wallet.

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