Almare Gelato Italiano accepts many alternative payment methods, and hasn't paid a dime for them because its vendors want a taste of the foot traffic at store's prime location in downtown Berkeley, Calif.
Companies are regularly testing their products in downtown Berkeley because of its large population of high school and college students. Plus there are several transit systems, including the BART, bringing in lots of customer traffic.
"I like technology so if [a company] comes in with a new thing that I don't have to pay for, I like to test it to attract more customers and to show customers that we care to give them different options," said Simone Arpaio, principal at the creamery.
Almare Gelato accepts all credit card types as well as Slyde, a beacon-enabled mobile app developed by SK Planet Inc.; Moocho, a mobile payment app for students; and Marqeta, a multi-account prepaid card that rewards consumers who commit to paying in advance.
"If you make the payment somehow fun or easier or different, maybe you can make people forget they're giving you money," Arpaio said.
The shop has accepted Slyde since the payment option launched in early July. When customers walk into the store, a Bluetooth beacon detects an app running on their phones, allowing them to pay with just a tap of a button at the point of sale. SK Planet partnered with DoubleBeam, a mobile solutions provider, and gave Almare Gelato a DoubleBeam Gopago point of sale terminal to accept sales.
"Berkeley has the perfect population of early adopters in young professionals and students, and a large number of forward-looking merchants," said Navneet Singh, vice president of product at SK Planet. "Almare Gelato is a perfect example of a merchant looking to innovate in the way it operates and interacts with its clientele."
Outside of Almare Gelato and other places around town, Slyde's marketing team is signing up customers to the app by offering them a $10 coupon. Almare Gelato is also running a campaign that sends a notification to a customer's phone, offering a 50% discount when they are near the store.
Three or four times the system has lured people into the store, said Arpaio. Any money Almare loses from the discount is repaid by SK Planet.
"I think this is the future of advertisement to see things popping up depending on where you are," said Arpaio.
While some alternative payment systems run in the cloud and require only a simple integration for setup, other providers, like SK Planet, use additional hardware.
Moocho gave Almare Gelato an iPad mini to accept payments, although the system doesn't get much use anymore, Arpaio said.
"Moocho doesn't do enough marketing so people stopped using it," he said. "All of these systems are really interesting but they only work as much as they market."
The drop-off in marketing is a strategic move by Moocho on account of 80% to 90% of its user base being students.
"During the latter part of spring and in the summer we don't concentrate on any marketing as school is out," said Bom Lee, vice president of national sales and management at Moocho.
The company plans on launching an aggressive marketing campaign within the next couple of weeks, as University of California, Berkeley students come back to school. Moocho will hand out flyers on campus and send mailers to the parents of the freshmen and sophomore class, since 57% of Moocho accounts are funded directly by the parent, Lee said.
Moocho is active on nine campuses around the country, including Ohio State University, the University of Wisconsin and Colorado State University. "On average, we have 33% of the student body at each campus," said Lee.
While vendor marketing is important to adoption and use, Lee said Moocho's model is appealing in itself because users can earn rewards on purchases at one store and use those rewards at any Moocho-accepting merchant and several online retailers.
Almare Gelato will soon start testing YouPlus, a mobile app that gives consumers free stuff from merchants they like when they watch unrelated advertising.
Arpaio said this app is particularly interesting from a merchant standpoint because the advertiser is the one that pays for the discounts and freebies the consumer gets.
Most of the payment providers take a small percentage of Almare Gelato's transactions, and Arpaio likes that "people come in and are curious about the product, which means they'll feel more engaged to buy things."