Tricia Duryee

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Gap Partners With Visa to Send Location-Based Offers to Your Phone

Here’s another variation on the idea that we will one day get offers sent to us on our phones while in the vicinity of a retail store. This time it’s from Visa.

The payments provider is announcing a partnership today with Gap, which has been using Visa’s platform since November to alert customers by text message to discounts on jeans and other marked-down preppy apparel.

The service does not require users to have a smartphone, or to download an application. Conveniently, they also never have to remember to check-in.

Rather, Gap customers, who sign-up for the program called Gap Mobile 4 U, will receive text alerts for offers when they’ve made a purchase on their Visa card in the same zip code as a Gap location.

While the first trial was conducted with Gap, Leigh Amaro, Visa’s senior business leader for the company’s global information products, said it will be expanding to other retailers soon. “We have a strong pipeline with more announcements coming shortly.”

The platform uses Visa’s normal global processing network, which analyzes and processes transactions in real time to ensure that payments are not fraudulent. With a consumer’s permission, Visa can use that information to see where and when the last transaction was made and deliver an offer based on their preferences and the time of day.

Visa cannot send an offer to a consumer unless they’ve made another transaction, or signed up with the retailer to receive them.

In a hypothetical scenario, Amaro said if someone fills up their gas tank early in the morning, a logical offer might be to send you a discounted cup of coffee at a nearby cafe. Or, if you make a purchase at the cafe in the morning, it might send you an offer that would draw you back in the afternoon.

For now, the purchase does not have to be made with your Visa card, but in the future, the discount could be applied afterwards, by crediting your bank statement. “It takes the work away from the retailer, which is important to businesses where you want to get people through the line as fast as possible,” Amaro said.

Other companies are trying to enter the space, including Groupon and LivingSocial, which offer instant deals via mobile applications. Foursquare and Shopkick also provide occasional discounts when a consumer has checked into the store. Visa has an advantage because of its scale and because the technology requires no downloads and very little user engagement.

A Gap spokesperson said they will continue to pilot the program with Visa in addition to exploring other ways to engage with customers on their mobile devices. Also in November, Gap gave away free pairs of jeans to the first 10,000 customers who checked into a store using Facebook Places.

Gap did not disclose how well either campaign performed.

Visa declined to discuss terms of the partnership, but said in addition to a financial arrangement between the two, it was designed to drive more payment volume.