New York — Recently, the daily deals market is getting saturated by day with the vague goal of using the power of social media to task such things as crowdsource as the lore behind the deals originator goes! And now, AOL’s Patch, a local news network has joined the band targeting Groupon and other deal providers, has forged alliance with renowned e-commerce giant American Express and its Serve card service to offer daily deals to local markets.
Desperately joining the rivalry as if there were not enough daily deals services, AOL’s subsidiary network, dubbed Patch Deals, will utilize AmEx’s new digital payment and e-commerce platform developed by the credit-card company, Serve.
But according to the Patch press release the Amex service would not be available until this fall, when users should be able sign up for Serve accounts via hundreds of Patch’s hyper-local sites.
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The Patch is the “hyperlocal” division of the newly-formed AOL Huffington Post Media Group, launched in select communities earlier this month with more than 800 neighborhood blogs and 85,000 small businesses featured on the network.
The deal will let users redeem local bargains, as well as transact with merchant promotions online or in person with an appropriate Amex card. And, in turn, local merchants will be able to advertise their deals in a “streamlined, effective way,” the press release reads.
Basically, it is literally the same service that Groupon and LivingSocial offer, but with the AmEx tie-in to give it that little bit of added validity and accessibility.
The Patch network represents a growing threat to Web behemoths, like Google and Yelp. Both have aggressively sought to corner the local advertising markets.
To utilize the service, Patch users “may be provided with Serve accounts” that would include a co-branded card, which users can simply swipe to receive their discounted goods and/or services. This means “no coupons to print or codes to remember,” says Patch PR.
By making alliance with Patch, Serve hopes to significantly widen its consumer reach to millions of users in Patch communities nationwide.
“Our collaboration with AOL’s Patch increases the scale and reach of the Serve platform and helps bridge the divide between online commerce and offline deals,” stated Dan Schulman, group president of Enterprise Growth at American Express.
“Through this simple yet fresh way of redeeming local deals, Patch and Serve will offer users an even stronger connection to their communities and the businesses in their area,” commented Warren Webster, president of Patch Media. “We are proud to partner with Amex given their reputation for innovation in the marketplace, and are eager to see how our collaboration may further benefit our collective consumers.”
While the daily deals market is certainly blazing right now — Groupon could potentially bring in $3 billion in revenue this year — Patch Deals seems more like a creative way to push American Express’ Serve payment service–a kind of pre-paid credit card meets PayPal, which launched in March — and boost traffic to AOL’s Patch network.
In the slip, Amex eventually gets an audience that currently is at 9.2 million unique monthly visitors (Patch Deals is only available in 6 communities at the moment). For Patch, the arrangement brings the potential for new revenue sources, which was “definitely part of the plan,” Webster said in a statement.
With such a nice strategy, Patch finds another way to tie readers close and to win the hearts — and, eventually, the wallets — of local merchants. At least, that is what it looks like at first glance.
According to BNet‘s Erik Sherman, Patch Deals could be “more economically attractive for merchants because there is no need for them to share revenue, and more convenient for customers, with a no-coupon form of in-person redemption, as well as online purchasing.” All of this adds up to profit for Patch/AmEx and loss of revenue for Groupon, LivingSocial, and the slew of (other) clones out there.