Google may acquire Punchd, the loyalty punch card on your phone startup, to add to Google Wallet or Google Offers, said to be paying for up to $10 million

This is just a rumor at the moment, but Google is said to potentially be acquiring Punchd Inc. for somewhere in the region of $10 million for its Google Wallet. Punchd is a San Francisco phone based loyalty card company that specializes in old style punch card loyalty programs right on your Android or iOS phone.

About Punchd and why Google may want to purchase it for its Google Wallet or Google Offers apps

Punchd is part of the venture capitalist Dave McClure’s 500 startups, which is an internet startup seed fund and incubator based in Google’s hometown of Mountain View. Punchd is run by three developers: Xander Pollock, Niket Desal and Reed Morse; all whom are expected to remain with the project inside the Googleplex if the acquisition takes place, according to sources who shared this news with TechCrunch. Centered around the principle of buy [add number here] get one free, Punchd is a simple loyalty program that rewards consumers for being loyal to a business. This would obviously fit well with Google Wallet and Google Offers.

Buy so many get one free has always been a successful marketing and loyalty program and it is likely that Google has watched the startup since its inception and has waited for the technology to reach a certain stage of progression before making an offer to buy out the company. In essence, Punchd is a local loyalty program that encourages repeat business from consumers to participating companies.

Just when you thought QR codes were in their death throws, they rear their ugly heads again. Yes, Punchd reads a QR code to award a “Punchd” hole from a participating business that, from what we can tell, gets printed on a receipt after you purchase something. Once scanned into the app, a hole on your punch card is filled until you have earned enough to redeem your full “Punchd” card for a free product or service. We would expect this may become NFC based if Google does indeed get its hands on the service and apps and engineers it to be part of Google Wallet.

Google is expected to add Punchd to either strengthen Google Wallet or its Google Offers services

Thus far, Google Offers is a “me-too” service that offers a daily deal in your area, just like Groupon and a whole host of other competitors. When we say your area, we mean your local area if it happens to be Portland, Oregon. Although NYC Downtown, NYC Uptown, San Francisco, NYC Midtown and Oakland / East Bay are coming online soon. Being part of Google Wallet is the unique aspect to Google Offer’s charm, but is it enough? Well, we just don’t know, the system is still in trial. However, adding Punchd to the Google Wallet certainly adds another string to el’ Goog’s bow and allows it to differentiate itself as well as adding another profit generating center to its Google Wallet product. See the videos below to see how Punchd works.

Competition is going to be tough for Google Wallet, will Punchd help?

Probably. The model of one offer a day in a local area is limited by its very nature. With a product like Punchd, Google Wallet could generate profit on a monthly basis from multiple businesses in any particular area, and with a relatively small investment of up to $10 million, Google can’t really go wrong. We look forward to hearing the official announcement of Punchd’s rumored acquisition by Google for its Google Wallet and we will bring you more details as we have them.

UPDATE: Punchd has denied it is being acquired by Google for its Google Wallet – great marketing strategy guys!