Start-up brings change to mobile app users

Pocket Change seeks to become the rewards currency of the mobile realm.

Bill Siwicki

Iván Rodríguez, an independent app developer, was looking for ways to increase use of his Hangman for Spanish Learners app when he came across Pocket Change—not  the literal variety, but a new mobile rewards currency from a start-up financially backed by the likes of Google Ventures, Google Inc.’s venture capital fund.

Pocket Change rewards registered users with points for actions taken or purchases made while in participating mobile apps. Pocket Change is in 400 mobile apps, the company reports, with more to come. In Hangman for Spanish Learners, users are rewarded with points for every three, 10, 20 and 30 games played within a day, starting fresh every day. Consumers can redeem Pocket Change points for merchandise in the Pocket Change store, including MP3s, Kindle books, HDTVs, Coach handbags, Sephora beauty products, and gift cards to Bloomingdales, Macy’s and Target.

It costs Rodríguez nothing to participate in Pocket Change; he just had to integrate into his app Pocket Change code that launches the Pocket Change store within his app. Since he debuted Pocket Change a few months ago, he has awarded 200,000 rewards points and the app has seen an increase of more than 100% in daily active users, he reports.

“When trying to make your app grow, you look for different options to attract new users and, most important, to make current users want to play again,” he says. “Pocket Change helps me achieve both targets. And it’s really good at increasing user engagement.”

Rodríguez has a lot of faith in Pocket Change. So, too, does Joe Kraus, a partner at Google Ventures, which led a $5 million Series A investment round in summer 2012, which was preceded by $1.7 million in seed funding in 2011.

“Pocket Change is at the center of some of the biggest changes going on in the marketplace with the intersection of mobile, commerce and social,” Kraus says. “Large brands and developers are increasingly aware that in a world of ever-increasing subscriber acquisition costs and intense difficulty in retaining users, engagement and loyalty are key to success. To engage with users today, they have to be mobile. Pocket Change is the only company I have seen that takes into account these changes in the marketplace and has a product with the potential to become the loyalty rewards platform for mobile.”

Pocket Change launched in August 2012. A small coin icon appears in every app awarding Pocket Change. Touching the icon takes the app user to the Pocket Change store. The company’s first goal was to get into as many apps as possible to gain a footing in mobile. The company today is beginning work on the second goal, to bring retailers and consumer brands into the Pocket Change store. Right now, the merchandise in the Pocket Change store was purchased by the company. That will be replaced by merchandise offered by retailers and brands that partner with Pocket Change, and pay a small fee for every Pocket Change transaction. Each transaction always will result in a retailer app download or the retailer’s app opening on the consumer’s phone. That’s where the value for the retailer comes in, Pocket Change says.

“Our value proposition is if you have a digital or physical good you’d like to use as a customer acquisition tool, we are the place to go,” says Ari Mir, CEO and co-founder of Pocket Change. “Say Best Buy gives us a $5 gift card. We put that in our store and sell it for 500 points. Redeeming the points either sends the customer to the Best Buy app page in the app store or to the app itself if it already is on that user’s phone. That will incent the consumer to use the Best Buy app. And he will buy a $20 DVD. The advertiser gets a lot of value all along the way; the end user has shown intent to engage with the advertiser.”

Mir says the company will announce its first retailer partners at the end of the month.

Currently, Pocket Change can only be found in Android apps. At first that might seem counterintuitive, as retailers, affiliate networks and m-commerce vendors have clearly shown that iPhone owners buy and browse much more than Android owners. But starting with Android made sense to a company that was planning on making a great many updates to its software during the initial months of testing.

“To get the experience right, you really have to iterate on the product at a very fast pace, and because it’s in mobile you need a platform that supports that quick pace,” Mir explains. “Apple’s iOS has a review process that really slows you down. Every time you submit a change to iOS it takes a week. In the early stages trying to launch a user experience, we thought it would be better to launch with Android and iterate faster. It was better to experiment on Android.”

Pocket Change for iOS is on the way.

Since launching in August, Pocket Change has acquired 16 million active monthly users, Mir says. In addition to Hangman for Spanish Learners, Pocket Change can be found in such apps as Highway Rider, Mobile Radio Live and Trivia Burst.

Pocket Change knows quite a bit about its users. For example, after agreeing to terms of service, Pocket Change scans the user’s smartphone to see which apps he has and doesn’t have.

“We require Facebook Connect if you are redeeming points for a physical item to make sure you are a real person so we can reduce fraud. From Facebook we pull basic information like age, gender and geographic location, but that’s it,” Mir says. If a consumer doesn’t want to use Facebook Connect, they cannot acquire physical items. Consumers can set their privacy settings in Facebook to indicate whether they wish to share information in Facebook Connect. Whether they share or not, they still can complete a transaction in Pocket Change so long as their Facebook name matches the name they registered with Pocket Change.

The company also gathers information in other ways. “We’ll run surveys and gather as much understanding of the user as we can,” Mir says. “What we’ve seen is people want us to know this stuff because they want the Pocket Change store experience to be personalized.”

Mir says after the initial push on mobile apps, Pocket Change will go after mobile web sites, and then perhaps conventional web sites.


Android, Ari Mir, Google Ventures, Joe Kraus, m-commerce, Mobile, mobile apps, mobile commerce, mobile rewards, mobile shopping, Pocket Change, rewards