As Apple Pay creates more consumer and merchant awareness of mobile payments, Benefit Mobile Inc. figures the time is right to focus on enabling charitable donations from smartphones.

After a year and a half of development and testing, Benefit Mobile rolled out an app that lets consumers tie their charitable donations to their retail shopping. Using a system that allows a Benefit wallet user to purchase store credit in the form of a digital gift card and apply that to purchases, the Grand Rapids, Mich.-based company is bringing digital payments to the fundraising gift card market.

"We saw that buying gift cards for fundraising purposes, such as how Scrip does for schools, had become a $1.5 billion market," said John Johnston, chief business development officer for Benefit Mobile. "But the process was labor intensive for people to buy plastic gift cards and wait to receive them. We wanted to create technology that would be easier for everyone."

The resulting mobile app allows the consumer to use a bank account for Automated Clearing House payments and establish favorite charities for donations. Benefit Mobile plans to support card payments in the coming weeks, Johnston said.

Nonprofit organizations register on the Benefit Mobile website, then promote the use of the mobile app for purchases. When the cashier rings up a purchase, the Benefit user is prompted to "buy a new card," or that amount of credit, through the app on the phone. A bar code and 12-digit PIN comes up, and the cashier can scan the code or input the number, Johnston said.

The retailer later makes a donation based on the percentage of the overall purchase it has established it will donate to the charity.

"We have had lots of positive feedback already," said Johnston. "People really love the app and would like to use it at more retailers. We are adding more every week, but it takes time."

Benefit Mobile currently lists more than 90 retailers, including Starbucks, Amazon, CVS, Gap, Whole Foods, JCPenney, Lowe's, Target and Walmart. The percentage of donation ranges between 1% and 22%, depending on print, in-store or online acceptance.

The 90-plus retailers is an impressive list for Benefit Mobile after only 18 months of development, said Tim Sloane, director of emerging technologies advisory services for Boston-based Mercator Advisory Group.

"Retailer adoption represents the really heavy lifting, and it's possible these retailers have back-end mechanisms to let Benefit ride on their current gift card rails," Sloane added.

Traditionally, mobile app developers provide some sort of incentive for consumers to use the app, but Benefit Mobile's model relies on a desire to support a non-profit organization, Sloane said. "It's an interesting model, but a tad narrow in that regard."

PyxPay and iDonor established similar technology earlier this year, targeting younger donors through a mobile payment setup. 

Salvation Army tested Square's mobile app for holiday donations three years ago, about a year after Citigroup Inc. in 2010 offered Causeworld, an app that allowed Citi customers to earn points that retailers would convert to donations to charitable causes. Causeworld evolved into shopkick, which is now a unit of SK Planet.

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