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While the aforementioned offers have expired, merchants can set up new Foursquare check-in deals via Amex's "Go Social" self-service center for SMBs.

Here's how the Amex-Foursquare marriage works for consumers: Sync Amex card with Foursquare account online. Check in at a location. Tap a "redeem offer" button. Pay with Amex card. Get a Foursquare push notification about the money-back reward (see image) within moments after the card is swiped by the merchant.

Swipely has begun working with 150 merchants in Boston, its launch market. The start-up offers consumers the chance to sync a credit card to its loyalty program. From there, whenever they spend money at a participating merchant, they can receive a reward or discount. Swipely supplies local businesses with point-of-sale signage and materials to promote the program.

Angus Davis, Swipely CEO, said his product should attract consumers and businesses alike because of its usability. There's no need for a smartphone app, much less a printed voucher, he said, in order for shoppers to get rewarded for retail store visits.

"Consumers don't have to change the way they behave in order to check in," Davis said. "Nor do they have to change the way they pay by scanning a QR code [or] using newfangled technology. Our program employs technology that everyone already has and uses."

He added, "For the local merchant, the program doesn't require any changes in the store. They don't have to upgrade hardware, install software, implement any special cards, or re-train their staff."

The 33-year-old CEO said his company would expand to New York, San Francisco, and other major cities in the first half of the upcoming year. "I do think that 2012 is a very ripe time for disruption," Davis said, "especially as the payment space interacts with Main Street merchants."

Other noteworthy developments as digital wallets came into focus during 2011: March/April:Groupon and LivingSocial launch "GrouponNow" and "Instant Deals", respectively, which allow consumers to buy time-sensitive offers with one click on their smart phones. To use the mobile commerce feature, users need to input their credit cards into their daily deals accounts. May 9: Scvngr struck a partnership with American Express to make redeeming LevelUp deals easier for consumers. Amex members who buy the deals need only use their cards while making a purchase to get the discount. As is the case with Swipely, it's not necessary to show the store clerk a paper voucher, barcode, or message on a mobile screen. May 26: Google introduced Google Wallet, which lets consumers pay for Google Offers and other items through their Google account. The Wallet mobile app works with credit card users for Citi, MasterCard, and First Data. Aug. 1: Verizon partnered with Amex to serve as the mobile carrier's digital wallet platform. The telecom was one of the first in its competitive space to create its own digital wallet.

“I thought someone would be able to change the way people shop, but I didn’t think it would be a startup because this will happen quickly and you also need brands that people trust. And PayPal is one of them. It takes the combination of a trusted payment company and the cooperation with great brands that people trust to change how people shop. I thought I would be able to convince all the major retailers all around the world because I have had  relationships with them for 30 years,” Kingsborough said.

Even with the departure of PayPal’s president Scott Thompson, who is now Yahoo’s new CEO, PayPal hasn’t missed a beat and is executing on its vision, Kingsborough said.

Solving consumer and merchants needs Kingsborough came in and honed the in-store payment initiative, which was underway well before Kingborough arrived. He focused on appealing first to consumers and making it simple for them to grasp, before ensuring the merchants could be able to understand the value of the system. Then he went about getting the cooperation of merchants, criss-crossing the country to call upon retailers and payment infrastructure companies to get them on board. Along the way, he helped PayPal pick up necessary components like location-based service WHERE, whose CEO Walt Doyle was personally persuaded to sell by Kingsborough. The plan is now to start rolling out the payment system in the second quarter though the first U.S. trials have already begun with Home Depot.

Kingsborough said he was drawn to PayPal’s approach to payments because it was aimed at solving deep consumer and merchant needs. He said competitors who focus on near field communication and other alternative payment systems are too often preoccupied with the capabilities of their technology, but they’re not addressing the pressing needs of users.

“Competitors think they’ll solve how easy it is to pay at retail, but that’s not a consumer problem. Their problem is how do they become masters of shopping and use their money smartly and organize their efforts to shop online, in-store and on mobile,” said Kingsborough. “We have a holistic approach. We ask the consumers [what they] want to do. They want to save money, save time and feel important in stores.”

NFC: a feature, not a solution That’s partly why he thinks NFC in particular isn’t ready for prime time. He said it’s going to take a while for it to proliferate in stores and on handsets. But more fundamentally, it doesn’t make consumer’s lives better.

“Do I think NFC will work someday? Maybe. But to me, NFC is a feature, not a solution that solves problems. If your strategy is NFC today, you need a new strategy,” Kingsborough.

Google and Isis, the carrier consortium including Verizon, AT&T and T-Mobile, are pushing hard on NFC and are angling to become the go-to mobile wallet for users, who will be able to pay at point-of-sale terminals with a tap of their phone. Many of the pieces for NFC fell into place for the technology in 2011, though there are still many hurdles ahead toward a broad rollout (subscription required) and mass consumer adoption.

PayPal’s approach bypasses many of the hardware constraints of NFC and pushes a two-pronged approach to in-store payments. Users can either use a PayPal Access card connected to their account, or more intriguingly, enter their phone number and PIN at a POS terminal and access their PayPal account. PayPal takes a user’s identification and turns it into a token, which is authenticated in the cloud, so no actual credit card numbers or financial data travels back and forth.

What it takes to win Kingsborough said the companies that win will be comprehensive and ubiquitous, allowing consumers to conduct transactions wherever they want to. By going with a software-based approach, PayPal can address about 8.2 million of the 10 million point of sale terminals with its payment system, without forcing retailers to buy new hardware. Then it’s up to PayPal to convince retailers to jump on board. It’s doing some critical work by signing deals with payment infrastructure companies like AJB Software Designs, which helps connect the point of sale terminals at many tier-one retailers to payment processors and financial institutions. Merchants that use AJB will have an easy path in enabling PayPal payments in store. PayPal is talking to other point of sale companies such as Verifone.

Merchants won’t just be getting a potentially cheaper alternative to credit cards. In PayPal’s vision, they’ll also be getting a way to push out offers to consumers, both in-store and nearby. Kingsborough said PayPal is working through its mobile app to address a variety of needs of merchants, from helping them manage online, mobile and in-store sales to improving loyalty and offering targeted discounts to users. Those additional tools will be rolled out over time in the next year or two. Google has outlined early plans to also provide coupons and offers to consumers using Google Offers in conjunction with Google Wallet.

Providing value But the other important winning determinant will be providing valuable, relevant and easy-to-use services to consumers, becoming the one mobile wallet they turn to, said Kingsborough. He said using tools like WHERE’s targeting and location technology will allow merchants to not just push out deals but deliver very context-aware content. For example, he said a clothes retailers might be able to message a nearby customer, letting them know they’ll earn $5 in their PayPal account that day if they buy jeans that they’ve purchased in the past. And, with the right permissions, the merchant may also be able to know the customer is with two friends and offer a group discount.

“It’s not just the capabilities of location-based services or understanding what a person just did; but it’s about being highly relevant to the person using the services,” Kingsborough said

He said in the battle to become the preferred digital wallet, PayPal will be the simplest for people to use, allowing people to link their credit, debit and loyalty cards, even potentially their drivers license. Just as people stick primarily to one browser, he said consumers will want to rely on primarily one wallet and he believes that PayPal will be that provider.

“Ours to lose” Kingsborough said it’s the whole offering that makes PayPal’s approach a winner. It’s a trusted name with more than 100 million users worldwide and it’s focused on providing value to both consumers and merchants with an easy path to ubiquity. “This is ours to lose,” he said. “I’m very confident about that. Otherwise, I’d be golfing right now in Hawaii.”

A couple of months ago we wrote about a pilot program at Arizona State University gives students NFC-enabled phones that can be used to access dormitories and university buildings. At the time we said that this is the perfect place for the widespread use of NFC to start: universities have long been known to be the birthplace of behavior-changing trends.

Let's look at the NFC Coca Cola machine. This is actually the second time that we have run across one of these prototypes (note: we were not at ad:tech this week but found this story from Mobile Commerce Daily). The first time we saw one of these Coke machines was at a reception around mobile payments from MasterCard in New York City a couple of months ago. It functioned just like any other Coke machine, except it accepted money through NFC. Make your selection and tap on the receiver instead of digging through your pocket for change.

"The combination of mobile commerce and location technology moves our business from the point of sale to the point of thirst," said Wendy Clark, SVP of integrated marketing communications and capabilities Coca Cola according to Mobile Commerce Daily. "We have to place bets and we have to take risks if we want to feel innovation in the way that we market."

We may see groundswell coming from the big brands that are looking to change how they interact with customers. NFC is not going to be adopted because the big corporations like Google make partnerships with other big corporations in the mobile and financial worlds and all of a sudden we are going to change how we go about our day-to-day lives just because they tell us so. The act of buying a Coke is one of the simplest and most straightforward acts in all of society. If you see that your friend just paid for a Coke at a vending machine with her smartphone, you are much more likely to go, "hey, I wonder if I can do that to." Once you have your foot in the door, you are more likely to use that process again.

Adapting Technology To The Situation

During Nokia World in London I met a developer that wanted to explore NFC because his father has Alzheimer's and he wanted to figure out how the technology could help him give his father a way to manage his day-to-day life. For instance, setting timers on items around the house to keep his father from doing odd things at odd moments, like opening cabinets in the kitchen at 4:00 a.m. or leaving the house at the same time and wandering the neighborhood, not knowing where he is going. If his father has a watch with NFC in it, he could program those household functions to only respond to the NFC timer at certain times of the day.

Think of it: this is how NFC will evolve. Consumers are not going to be bludgeoned from on high by companies like Google, Sprint and MasterCard. It will start as a groundswell where developers see a problem, solve a problem. Big brands, like Coca Cola or Wal-Mart, will start instituting NFC solutions and people will become familiar with the technology first. It is one thing for Google to have a big demo, roll out a bunch of partners and say "this is the future." It is another for people to actually have the technology in their hands, using it to do a variety of activities.

Even the Google Wallet competitor, ISIS, thinks that competition is good for the realm. In an interview with CNET, ISIS CEO Michael Abbott said, "competition is what this space needs." Why would he say something like that? Because Abbott understands that people learn from other people and that the more solutions there are out there for people to see the technology in action, the more will ultimately adopt it. Competition drives innovation and better products in consumers' hands. In that way, the technology adapts to the situation, not the situation to the technology.

But, though Burke saw an uptick in business, her cafe ended losing close to $10,000 because of the Groupon campaign. Though Groupon had told her that 98 percent of the customers who came in for the deal would spend more than the value of the Groupon, most did not, or if they did, at small amounts closer to 10 cents than to 5 dollars. Burke also noticed that few of the Groupon users became regulars, with many coming from out of town, others trying to redeem multiple deals at once, and some even behaving abusively to staff

To make matters worse, the Groupon resulted in several administrative nightmares. Tracking 900 deals proved extremely difficult, and ended up in multiple instances of fraud with users redeeming the same Groupon more than once. The deal, scheduled by Groupon, ended up occurring at the same time as another business boosting event, so that huge lines formed out the door, an unideal situation for a cafe

“What was the saddest part of it for me was that this had had happened to a lot of businesses but because no one had ever said anything we all just assumed (and myself included) we just assumed we were bad business people. That we just didn’t know what we were doing. If everyone loves Groupon so much, we must be wrong," she told TechCrunch

But Burke is not alone. The Wall Street Journal picked up the story of U.S. Toy Co this January, a family toy store that ended up with 2,800 customers on a retail deal, but ended up losing money on 75 percent of the deals. Like Burke, Groupon took 50 percent of the deal profit, which had offered $20 of toys for $10, leaving U.S. Toy with $5 on each deal. Customers ended up spending less than the normal average per sale. And, owners estimated that 90 percent of the deal users were already regulars--not new custome

Peter Ayliffe said: “The way we pay is changing, driven by the rapid uptake of new technologies and growing consumer demand for more flexible payments

We are already seeing early adoption of mobile payments, and in the coming months we will see the arrival of mainstream NFC technologies, advanced loyalty and e-commerce services, and ultimately, the launch of a new digital wallet.”

Support for other mobile Operating Systems, multiple currencies and payments to and within non-European countries will be added over following months.

Visa Alerts notify registered Visa cardholders on a real-time basis whenever their card has been used to make a purchase or to withdraw cash through Visa Europe’s payment network.

developed by Visa Europe in partnership with Monitise, the first of many services that will be made available through the partnership announced in early 2011.

Visa Mobile Person-to-Person payments allow registered users to transfer funds to any Visa cardholder in Europe from their mobile phone, backed by all the security and expertise of Visa Europe’s industry-leading processing systems. The app makes it easy to send money to an address book contact, to a mobile phone number, or to a specific Visa card number – whether or not the recipient is registered with the service.

Monitise plc (LSE: MONI.L) is a technology company delivering mobile banking, payments and commerce networks worldwide with the proven technology and expertise to enable financial institutions and other service providers to offer a wide range of services to their customers in developed and emerging markets.

However, Pilu also remarks that China’s approach to the technology is different. “They see this as a big IT system which they install in a given city, with a huge control room where you can see everything,” he says. “That’s a very expensive approach, and it’s also very rigid.” “In the UK however, these big ticket investments are out of the question, so we have to be agile, work together, form relationships, prototype projects and fail quickly.”

"From avoiding the search for ATMs, to finding easier ways to split restaurant bills with friends or making payments anytime, anywhere and from virtually any device, Canadians want easier, faster and safer ways to shop, share expenses, send money or get paid back," said Darrell MacMullin, managing director of PayPal Canada, a subsidiary of eBay and the biggest name in online payments.

PayPal reported $750 million in global mobile payment volume in 2010 and expects that number to hit $3 billion by the end of 2011 as more consumers switch from regular cellphones to smartphones