Krispy Kreme's new payment and loyalty app is betting big on customers' appetite for donating to charity.

Retailers are increasingly seeing charitable donations for national or local causes as a good way to engage their customers and help support their communities, said Don Zimmerman, chief technology officer for NCR Hospitality, which provides the underlying technology for the Krispy Kreme app.

The donation function, announced today, lets the app's users add funds to a virtual kettle for the Salvation Army during the month of December. The app itself was announced Monday and addresses another modern trend — consumers are carrying less cash on them, and are thus less able to make impromptu cash donations to volunteers on the street, Zimmerman said.

"The thinking behind this promotion for Krispy Kreme is that, yes, it is the giving season, but people are paying for things by other means," Zimmerman added. "You don't need cash or a credit card. You can pay for your doughnuts with the app, and Krispy Kreme can encourage you to donate through the same mechanism."

Krispy Kreme is the first retailer using a donation capability through Atlanta-based NCR’s offering, but NCR is not the first vendor to mix donations into mobile technology.

Vanco Payment Systems helps churches, nonprofits and other religious organizations cut down on handling cash and checks from parishioners. Its mobile app is designed to be similar to those used in the coffee shops and it can send push notifications to parishioners as they walk into the church.

Payment Alliance International, a Kentucky-based ISO and ATM provider, supports a "Digital Donations" program through its ATMs.

Sionic Mobile's Shop2Give app can add a 2% donation to a non-profit as part of a retail purchase, or let the app's user donate directly to a charitable organization.

NCR's Engage Mobile platform supports customer engagement through payments, loyalty and other interactions at the point of sale, said John Lawrence, senior director of NCR Hospitality and product marketing.

The Krispy Kreme mobile app allows the franchise to feature any charity it wants in the future, Lawrence said.

"Through the month of December, Krispy Kreme will nationally feature a kettle and bell for Salvation Army right when the user opens the app," Lawrence said. "Later, each Krispy Kreme franchise can tailor the app to any local fundraiser or cause it might want to get behind and engage their customers to participate."

That flexibility, as well as being one of the first major franchises to take advantage of a mobile app for donations, should prove beneficial for Krispy Kreme, said Jaclyn Holmes, senior manager of payments insights for Auriemma Consulting Group.

According to Auriemma's research, mobile messaging is "an effective way in which to engage consumers, even if the merchant is not verbally prompting them," Holmes said.

The concept of aiding charities through an app is "something to keep a focus on" as it will help retailers collect data to show they are socially responsible in helping a charitable cause, Holmes added.

Krispy Kreme has slowly deployed the Krispy Kreme Rewards app, hoping to have it available to customers at all of its U.S. stores by the end of the year. In the future, Krispy Kreme is likely to add ordering and pay-ahead options to its app, much in the same way Starbucks has developed its mobile app.

Krispy Kreme should benefit from taking a step-by-step approach, NCR's Zimmerman said.

"If you lay everything on the customer at one time, it could be difficult because they are so used to paying a certain way," Zimmerman said. "This incremental approach can be more effective as the industry starts to move toward this mobile app development."

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry