As you may be aware – I hate loyalty cards.  I think they’re a pain in the butt and offer way more reward to the company than to me.  I don’t mind loyalty programs, but I want the burden to be on the company to keep track of what I’ve purchased and my rewards.  This may be what led to the development of Tetherball, which is a service that connects mobile advertising & marketing directly with individual consumers via a small rfid chip on their mobile devices.  Marketers and advertisers seem to be estatic about the possibilities, but to me, it sounds a thousand times worse than loyalty cards.

Security Issues

While it sounds convenient to have a sticker on your mobile device that can interact with devices at a store, there’s usually very little security in current rfid technology.  This means that anyone with the proper device can read the information that’s stored on the rfid chip.  There’s no way for the owner of the mobile phone to turn off the rfid or control what information is on it or who can access it.  There’s also nothing to stop the store that gave you the chip from tracking you in places you may not know about.

Awareness Issues

I wonder just how much people who are using these rfid devices understand how the company is using their information.  Are they aware of the possible security and privacy risks?  Are the companies devulging any of these possible issues?

Scaling Issues

Even if you like the idea of a rfid chip for a loyalty program, how is it going to work when all the loyalty programs start doing it?  Is your mobile device going to be covered in stickers?  Just think about how many loyalty cards many people carry – watch the next lady with a big purse shuffle through a card deck looking for the proper card.  Will the companies be able to access the information on the other chips?

Transferability Issues

What happens when you get a new mobile device?  Will you be able to transfer the sticker to the new device?  Probably not.  So you’ll have to go through some sort of new sticker transfer process.  What if you have multiple devices?  Depending on how the technology is implemented, there may be issues with controlling who is actually using the loyalty chip.

Less Invasive Technology

It seems like there would be less invasive ways to use mobile technology for loyalty programs.  Many new phones are smartphones – or Internet enabled, which means they’re able to connect to an Internet website.  Many also have the ability to connect to wireless hotspots.  As the price for these devices comes down, more people will have them.  A company could use their wireless network in-store to easily create the same sort of loyalty programs without having the issues presented above in an rfid chip.

What Would You Do?

Is there a company you trust enough to put a rfid chip on your phone?  Are you concerned about your privacy and security of your information?  What do you think?

(photo by grey pumpkin @ Flickr CC)

Technorati tags: tetherball, loyalty programs, mobile, marketing, mobile advertising, business, reward programs

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