Capital One and PushPoint are planning to launch a system that matches payments activity with other elements of the shopping process, such as a consumer's location in a store, in real time.

"We're sitting at the intersection of spending and marketing data," says Greg McAllister, the CEO of PushPoint, which is working with Capital One on an initiative that will provide mobile offers that can be redeemed at the point of sale.  The companies have been demonstrating their Spark Pay system at conferences and plan a full launch in 2014.

"Capital One is unique in that they are a retail bank and a point of sale provider. Integrated marketing and payments are a key part of differentiating themselves," McAllister says.

Spark Pay enables business owners to create and distribute special offers through Facebook, Twitter and email. The financial institution is working with PushPoint to use location-based technology and social network data to deliver offers to consumers when they are near a specific merchant. Capital One did not make an executive available for an interview.

Spark Pay's location-based component will use PushPoint's OfferHub offer management platform. OfferHub imports transaction data and integrates with a financial institution's mobile and tablet-based point of sale system, enabling businesses to offer personalized marketing. OfferHub also enables merchants to target consumers within a specific, designated geographic region, and provides a report of inbound customers and total payment each campaign is generating.

"The system brings together all marketing channels, such as display, search, social and email all in one place and at one time when consumers are shopping and making payments," McAllister says.

Merchants create and distribute offers and ads via a dashboard, and push the content to consumers through text message, mobile apps, social media and Bluetooth beacons.

Bluetooth Low Energy (BLE) beacons use a Bluetooth-based positioning system communicate with nearby mobile devices. Once a consumer's device is detected, merchants can send marketing, coupons, offers or other content.

"Beacon will have a novelty factor for the merchants and consumers at first," McAllister says, adding PushPoint also incorporates more traditional technology such as text messaging. "Merchants at the small to medium size level want the channels they have been accustomed to using. We're using that as a springboard to providing technology that is often overlooked when it comes to innovation like beacon."

PushPoint is working with a partner that provides beacon hardware, and the technology is available on both iOS and Android operating systems, McAllister says.

Beacons are starting to gain steam in the payments industry as companies look for alternatives to Near Field Communication hardware to support mobile payments and offers.

Apple is using BLE to power iBeacon, which is part of its new operating system for iPhones. PayPal and shopkick have their own BLE-based beacon products.

"iBeacon and other in-store location-based services have the potential to transform the physical store into a digital store," says Adam Silverman, a principal analyst at Forrester Research. "We are also seeing an uptick in the number of retailers who are interested in leveraging in-store tracking and analytics. Their goals are to make immediate improvements to the store layout to drive conversion, and to begin to learn the best way to market to customers while in the store."

The industry is still in the early stages of really understanding the implications of this technology, Silverman says. "For instance, with in-store analytics retailers will need a guest Wi-Fi network, a data warehouse to store the data, and the staff needed to stitch data from disparate sources to generate customer insight," he says.

Retailers must also address concerns customers have over privacy and how their location data will be used, Silverman says. "With this said, I do expect more developers to begin deploying applications that leverage this protocol, and I expect the applications and beacons to interact with more sensors and more sources of data."

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