Google Buys Punchd to Boost Google Wallet, Offers

Google purchased Punchd, whose team of entrepreneurs created loyalty cards on Android smartphones donated to Cal-Polytech's computer science department. Punchd could be added to Google Wallet.

Google (NASDAQ:GOOG) confirmed it has purchased Punchd, a maker of loyalty cards for keeping customers coming back to patronize local businesses.

Punchd launched in 2010 to provide loyalty cards intended to boost user engagement between shoppers and stores, restaurants and other businesses.

Punchd Co-Founders Reed Morse and Grantland Chew "whipped up the first prototype in an Android development class" using Android phones donated to Cal Polytech Institute's computer science department.

"We built a senior project, and later a business, around our idea. And while our team of entrepreneurs has stayed small, our ideas have not. We're excited to announce that Punchd has been acquired by Google," noted the Punch team in a note on its Website July 11.

Punchd is joining Google's teams in Mountain View, Calif. eWEEK asked Google what the Punchd team will be working on, but a spokesperson declined to say at this time, adding: "They've built a cool and efficient way for customers to engage with local businesses, and we think they'll be a great fit for our mobile and local teams."

Punchd's premise is simple. When customers buy a product that's part of a loyalty program, the participating store lets the customer scan a QR (Quick Response) code they keep behind the counter.

The Punchd application keeps track of how many times the QR code has been scanned, and pings the customer when their loyalty reward becomes available, according to GigaOm.

The Punchd technology, or something approximating it, appears destined to be used to fortify the one-two punch of the Google Wallet mobile-payment service.

Google Wallet, an application platform that lets shoppers tap-and-pay for goods from participating stores using their Android smartphones is launching this summer in New York and San Francisco. The service is being paired with the Google Offers local deals service.

Google could add Punchd-style loyalty cards to the mix to keep customers frequenting coffee shops, restaurants and other local businesses and purchasing goods with Android smartphones that use the Wallet service, which is based on NFC (near field communication).

Google, which has about $36 billion in its coffers, made some 48 purchases in 2010 and has acquired more than a dozen so far this year.