An interesting announcement from social media check-in service Foursquare last week is a harbinger of things to come as social media entrepreneurs, some of whose upcoming IPOs depend on proof of clear revenue streams, try to connect with your wallet.
Foursquare plans to hook up with American Express to provide instant discounts in stores when you “check in” beforemaking your purchase. An example: check in at H&M, pay at least $75 on your AmEx card, and you’ll get a $10 AmEx credit. Although Foursquare won’t be getting a cut, the fact that it’s hooking up with AmEx helps legitimize its concept, will attract more check ins, and inspire shoppers to use their cards. And to state the obvious, $10 back is a lot more exciting than earning a Foursquare badge or becoming mayor of a store.
This idea also helps Foursquare grow beyond tightly packed urban areas where its features have proved to be most useful. The credit card concept will play just as well in a Minnesota mall as it does in Greenwich Village.
Still, there will need to come a time when Foursquare and its competitors come up with ideas that generate actual income. For now, as Techcrunch notes, Foursquare remains “a revenue-free zone.”