Brixton-Pound-10-front-actual21-300x225As noted in prior posts, context is critically important in the customer experience equation– and localized currency is one of the more interesting new examples. A development emerging in the sea of similar commentary on 2015 being the “year of the mobile wallet” is taking place in an area in South London. The Brixton Pound is an initiative launched in 2009 that is a “complementary currency” which acts as an alternative localized currency, but nonetheless is derived from the value of the British Sterling. Hence the term “complementary”, versus pure crypto-currencies, an example of this being Bitcoin. Its larger aim is to encourage and empower commerce and connect small merchants with neighborhood customers via an alternative localized currency.

From a customer experience perspective, what is notable is the recent announcement that the Brixton Pound will be have near-field communication (NFC) functionality, allowing it to communicate with other nearby smart devices, as well as mobile beacon support by early in 2015 (prior mobile payments initiatives were via SMS). As has been well-documented, the evolution of the mobile wallet is now getting a major push with the latest iteration from Apple, while Google, PayPal, Square and so on has been in the NFC game for some time now, however less so in the beacon space. Apple Pay, with NFC enabled in the new 6 platform, might be the “game changer” that really pushes this well-documented movement forward. Recent data has attributed already a 1% market share through Apple Pay, despite the fact the technology has only been recently introduced to the market and requires the latest iPhone to use.

Why is this important in the context of the Brixton Pound? Large global bricks and mortar retailers have long looked at digital-based competitors such as Amazon as a constant threat due to their customer insight and ability to scale, and the fear of “show rooming”. But, in this age, new competitors can emerge in areas unforeseen, with surprises coming even from the small local merchant market. The combination of a local alternative currency, a mobile phone NFC-based payment system, and the hyper-local insight provided by Bluetooth LE based solutions such as Apple’s iBeacon, and platforms, including inMarket, can become a truly disruptive force coming from unexpected quarters.

It’s a matter of trust

As has been noted, currency in any format is fundamentally based on trust, whether that trust lie in the global central banking model set up after World War II via the Bretton Woods system or in scarcity commodities based models such as gold, which Bitcoin mimics in its algorithms.

In the local context, trust is also a major factor, albeit of a different kind. Trust that the merchant knows the customer’s needs, trust that the customer knows the merchant’s values or quality, with traditional currencies only being the facilitator of the transaction. Alternative localized currency, such as the Brixton Pound, can be more than facilitators, but rather, enablers of customer engagement, a force for local economic development, and even alignment with wider political goals reflecting the values of the locality. For the Brixton retailer, the merchant likely has more insight into the particular needs of its customer base, especially when that customer is a known factor using the alternative localized currency. Large global companies invest millions on gaining and scaling exactly this same customer insight in order to establish the type of relationship that the small local merchant retains every day. What has been an impediment to the Brixton Pound, and with currencies in general, is ultimately trust in the currency itself, which by the way, has great logos!

However, the introduction of new ways to transact via what we carry in our wallets, combined with new developments in proximity-based insight via beacon technology, bring fundamental shifts to this trust relationship. Reliable and transparent models are in place to ensure customers have faith in new currencies. Recent data suggest this is not a small technology shift. inMarket, a firm that scales beacon technology across location-based networks of retailers, revealed a studythat demonstrated at 20-times increase in purchase intent as a result of its platform.

Put these components in place, combined with an alternative localized currency, deep local knowledge of individual preferences, and the context of the transaction, and the “trust” equation is in place. Business models, like inMarket, that scale their services across a variety of merchants, small and large, has the potential to challenge the global players in the race for wallet share. Small merchants, tied to deep historical and localized knowledge of individual preferences, now have abilities to leverage such platforms to scale in combination with others in the area.

The Brixton Pound initiative is evolving. With these technology shifts taking place in mobile, it should be a very interesting year to witness how digital wallets, proximity-based insight, and network-based beacon platforms tied to a specific set of local merchants could transform the small business and consumer relationship, and ultimately impact the strategies and technologies of the global retailers. From an enterprise perspective, the competitive landscape may no longer be primarily among the global participants, it may also include micro-networks of community based merchants as well. Perhaps a “Brooklyn Dollar” is in the works?

Note: this post first appeared in TCS Enterprise Insights here.