There’s no excuse, really, considering that practically every major Internet company offers some form of calendar with built-in integration to notify you of your friends’ birthdays. (It’s Facebook’s forte.)

E-retailer giant Amazon knows that people like me exist, and wants to make the best of my terrible memory. That’s at least part of the idea behind Amazon Birthday Gift, the company’s Facebook-integrated social gifting product rolling out Tuesday.

The concept is simple: Send a friend whose birthday is coming up one of Amazon’s Birthday Gift cards — a virtual gift-card credit to spend on Amazon.com — which won’t show up for your friend until their actual birthday. Other folks (including the forgetful ones like me) come along, and can contribute their own money toward adding to our friend’s birthday gift amount, thus increasing the size of the pot for your buddy’s special day.

I’ll give Amazon this — it’s lightweight, and certainly clever. Tap into Facebook’s existing social graph birthday calendar, and Amazon becomes constantly available as a gifting option, a way to divert dollars over to its massive online retail platform.

But Amazon’s Birthday Gift product is far from alone on Facebook. There’s Wrapp, to begin with, the social gifting application that lets you and many other contributors give gift cards to friends, working in much the same way as Amazon’s new product.

That’s not to mention Gifts, Facebook’s homegrown social gifting product, birthed out of the company’s acquisition of startup Karma last year. With Facebook Gifts, you’re readily prompted to buy stuff for friends via Facebook itself, choosing from a growing list of physical, virtual and digital gifts.

So, yes, Amazon is vying for gifting attention on Facebook.

But despite being on Facebook’s turf, Amazon is strong here. The commerce giant’s gift cards offer recipients credit toward hundreds of thousands of items on Amazon.com — a veritable playground of stuff — which means that the birthday boy or girl isn’t limited to just what Facebook Gifts or Wrapp’s gift cards offer. In Facebook’s case, the gift selection is still relatively small, and Wrapp is still working hard to grow its partnership roster. That’s a strong pitch for gift-givers to use Amazon’s service instead.

Now the question is, Amazon or no, do people actually feel comfortable sending birthday gifts via a Facebook page?

Perhaps — if it’ll help them remember to send it in the first place.

Or perhaps you go the Facebook Gifts route and get your loved one a box of Oreos.

Not kidding. Facebook has amped up the volume on its Gifts product for V-Day, pushing out a special prompt to a percentage of users across the U.S. that prods them gently into giving a present to a friend (romantic or otherwise) through the social network’s gift-giving service.

What you’ll see, if you haven’t already, is a little banner at the top of your News Feed as you log in to your Facebook account. For those in relationships, the prompt will suggest you give a gift to whomever you’ve listed yourself as in a relationship with. But it’s not dependent on whether you’re in a relationship; the singles among us get a prompt saying something like, “Surprise your friend with X gift for V-Day.”

At first blush, I must say, I was taken aback. Not by the fact that this is showing up in my News Feed, mind you; Facebook proved its willingness to pimp its Gifts product back in December, when it did something similar for the holiday season.

No, it’s the types of gifts that Facebook suggested I give. Honey-flavored jelly beans. A package of Oreos. A Starbucks gift card. Now, I don’t pretend to be an expert on relationships, but if I gave my Valentine an Olive Garden gift card on V-Day, I imagine I’d be in the doghouse.

These gift suggestions felt to me like a reminder that Gifts is an infant service, with a limited selection of partners and a need to push the product hard in order to ramp it up. What’s more, instead of serving the purpose of telling someone you care, the limited selection and prominent feed placement almost feels like a reminder of how impersonal the process is. Sort of like saying, “I forgot about you until Facebook reminded me. Here’s something small to make up for that.”

For what it’s worth, Facebook says the product recommendations cycling through its suggestion box are randomized, all found in the “Valentines for All — $30 and Under” shop in the Gifts product menu. And I’d imagine these aren’t the only things Facebook would suggest you buy your Valentine.

Still, I’m waiting for the product to get better and smarter and to begin sporting a wider, more appropriate selection of gifts. I imagine that’ll take convincing of partners that it’s worth their while, and for that, Facebook may need to show early positive results. Jury’s still out on whether it’ll pay off.

Over the past couple of years, American Express has been actively working on ways for its members to interact with merchants online.

As a result, Amex cardholders can link their account to a number of social networks, like Foursquare, Facebook and Xbox Live, for the chance to unlock discounts.

This announcement today, however, marks the first time American Express is allowing consumers to buy things through social networks.

Leslie Berland, the SVP of digital partnerships and development at American Express, said a year ago, it started distributing offers and coupons on Twitter. In that time, she said, cardholders have saved “millions of dollars” from “thousands of merchants.”

Starting today, all cardholders will have to register to participate, even if they’ve used the service before, this time to provide a physical address for delivering products.

After that, it should be pretty painless to buy something. For instance, participants will be able to buy a $25 American Express Gift Card for $15 this afternoon by tweeting #BuyAmexGiftCard25. American Express will reply via Twitter, asking the user to confirm the purchase in a tweet. All products will be shipped via free two-day shipping.

Starting Wednesday, more items will go on sale, including an Amazon Kindle Fire HD for $150 and an Xbox 360 4GB console with three months of Xbox Live for $180. All deals will be offered for a three-week period.

While it’s easy for cardholders to participate, American Express is having to do a lot of work on the back end to make it run smoothly. There is a customer care support team to address any issues that arise, and it is working with a partner to provide the shipping logistics — neither function trivial … or cheap.

Berland acknowledges that it took “a great deal of work to think about every single use case.”

The commerce platform is coming to Twitter first, but it will also eventually come to Facebook and other platforms, Berland confirmed. Twitter is not getting a cut of the revenue from the transactions. “This is Chapter One,” she said. “We are very invested in Twitter, and we’ve taken it a step further here, but the best is yet to come. We are very confident that it will perform very well.”

To date, there have been very few examples of Twitter commerce. The most high-profile launch, perhaps, was by Chirpify, a Portland-based startup that helps merchants accept payments from a Twitter stream. Otherwise, the best implementation of selling products on a social network so far is likely by Facebook itself through its sale of gifts.

Here’s a video demonstrating how an Amex cardholder can redeem offers and buy something through Twitter:

Despite the myriad companies pushing into the virtual gift-card space, it’ll be a long time before physical gift cards go away (if ever). It’s a multibillion-dollar business.

Facebook knows this. And that’s why the company launched the Facebook Card on Thursday morning, a real-world, physical gift card able to be preloaded with credit for multiple stores. Think of it as an uber-card, which can manage balances across the partner companies (only four at launch — Target, Sephora, the Olive Garden and Jamba Juice). You can send the cards to your friends via Facebook’s Gifts product, and the balances are available online for users to keep track of.

It’s a curious move for a few reasons. For one, remember Credits? Those also came in the form of physical, real-world cards available directly through retailers on their shelves. Alas, Facebook gave its Credits program the ax last year, claiming problems with friction in payments on the gaming side.

I can’t help but wonder, though, if the existence of Credits had something to do with how Facebook is partnering with retailers to use the new Facebook Cards. The way Cards works, you see, is that you have to maintain your separate balances at each retailer inside your overall Card account. So if you go online and open up your Facebook Card account, you’ll find a detailed list of, say, 20 bucks in your Target account, and another $35 for some breadsticks over at the Olive Garden. (Those breadsticks are addictive. Be careful.)

But here’s the thing: Wouldn’t it have been easier to use one single, unified currency to keep track of all the Facebook Card money you have across the disparate retail accounts? So, rather than have to split that cash between Target, Jamba Juice and the like, I’ve got one repository for everything? Credits probably would have worked pretty well there.

My best guess: Facebook got pushback on this from the retailers, who would rather have you locked in to their specific, store-related “currency” than be able to spend it across a great many. That’s the whole point of retailers offering gift cards — they want your money to go to them alone. Also, I imagine there’s some sort of infrastructural problem in setting all of this up; perhaps federal or state taxes on different types of virtual currencies changing hands with Credits that I’m just not aware of.

Facebook, of course, had “nothing to share” on the matter. (But thanks anyway, Alex!)

Something else that’s interesting to mull: What with the rise of the smartphone these days, many retailers are building in-house apps for folks to keep track of their gift card purchases and balances directly from the phone. Starbucks is a perfect example of this. The advantage of that model, again, is that these retailers can lock customers into using their cash on a specific store. In other words, Starbucks knows you’ll spend your money at Starbucks when you load money onto your Starbucks account.

That’s not as much of a sure thing when folks are loading cash onto a Facebook Card. People have options, and can, for example, split the $50 they would have gifted to a friend across Sephora and Target accounts on the Facebook card, rather than just giving their friend a $50 Target card outright. Follow me?

I imagine Facebook’s argument to retailers would be increased distribution potential, and perhaps a lower cut of the profits with partners. Again, sadly, Facebook had nothing to share on the details of the deal.

One last thing: Apple’s Passbook. Right now, there’s no integration with Facebook’s Card and iOS’s Passbook. And I imagine that sort of relationship would be complicated (if you’ll pardon that awful, overused pun). For anyone partnered with Facebook in the Card program, Facebook Card integration on Passbook would essentially negate the need for other partners to either build apps or integrate with Passbook themselves.

Plus, I haven’t had a lot of time to think about this, but perhaps there’s some complications in dealing with Apple on this sort of thing, as well.

Again! Nothing to share from Facebook on any sort of Passbook integration. (Come on, y’all! Sharing is caring.)

Expect the Cards initiative to roll out over the next few days to U.S. users.

Lots of them, actually: The company just rolled out digital gift cards that can be exchanged between both Square and non-Square users. The cards can be presented and redeemed in a variety of ways, including through Apple’s Passbook app — Square’s first integration with Apple’s new digital wallet.

Square creator Jack Dorsey was taking interviews earlier today in New York City and showing off the new gift cards.

Here’s how it works: A Square user must first update the existing consumer-facing app, simply called “Wallet” (formerly named Pay with Square). Or, if you’ve never used Square, you’ll have to download the Wallet app.

From Square’s directory of approximately 250,000 businesses — merchants using Square software on an iPad to process their in-store payments — a consumer can opt to send a friend or family member a gift card from one of those stores. This, of course, includes digital gift cards from Starbucks, which recently began using Square to process credit card transactions at 7,000 locations across the U.S.

An email will then be sent to the recipients, with a few different options for redeeming the gift card. The customer can use Square themselves, send the gift card to their Apple Passbook app on iPhone or just show a QR code at the store. The recipient can also print out the QR code from their email, if they want to skip using a smartphone entirely.

By working with Passbook, Apple’s digital wallet app for iOS 6 that stores loyalty cards, coupons and airline boarding passes, Dorsey said the company is hoping to turn even more consumers on to Square. He also said the gift card program will appeal to Square merchants, as it doesn’t involve additional issuance fees — just the standard Square processing fee.

But the biggest benefit is probably the word-of-mouth marketing Square will get as its users send around digital gift cards. The company also further establishes itself as some sort of card issuer.

In other words, it might not really matter to Square if people actually end up using the gift cards — and there’s a good chance you won’t. Last year it was reported that from 2005 to 2011 the total amount of money on gift cards that went unspent could be as much as $41 billion. At the same time, merchants still reap the benefits of the upfront purchases of a gift card (in most U.S. states).

Sure, having a gift card on your smartphone might make it easier for some people. But there’s probably also a huge segment of consumers that haven’t adopted digital gift cards yet.

Dorsey also talked about Square’s international expansion plans, and said the company plans to make its first official footprint overseas within the first half of 2013. He declined to say whether that will first occur in Europe, Asia or South America. “Europe uses chip and pin technology, which we have to look at closely. In Japan, consumers are using their smartphones for more and more things, and in places like Brazil new technologies are just adopted so rapidly … they’re all pretty exciting,” Dorsey said.

Here’s the latest to come of the pair’s improved relationship: You can now purchase iTunes credits for friends on Facebook using Gifts, the social giant’s major social gifting e-commerce initiative.

It works the same as all other purchases made through the Gifts product. Choose an item to send to a friend through Facebook (in this case, the iTunes digital gift), and you’ll pay via your credit card through Facebook. Right now, most of the options Facebook offers are physical goods like food, toys and apparel.

Lately, however, Facebook has geared up on digital gift card offerings. The company unveiled a series of new partnerships at a recent event, including subscriptions to Hulu, Pandora and Rdio. And the marquee partnership Facebook launched Gifts with was the Starbucks deal, which lets users send coffee cards to their friends via the service.

Facebook’s deep push into e-commerce appears right as holiday shopping season kicks off — it’s no coincidence that the iTunes deal is being announced on Cyber Monday — coming just before what is expected to be a banner retail sales season.

It also comes in the wake of a rather ugly season of downturn for shares of Facebook. Investors have questioned the company’s ability to generate sustainable long-term revenue from ads delivered to desktop and mobile users, and as a result, we’ve seen Facebook’s stock price slashed to around half of what it debuted at this summer. Facebook Gifts is a multi-platform initiative across the Web and mobile devices, not strictly beholden to generating revenue primarily from desktop users as is the case for the bulk of Facebook’s existing ad products.

So, does bringing Apple on as a Gifts partner actually amount to building out another meaningful revenue stream?

Perhaps, according to a little back-of-the-envelope math. Per Apple’s last 10-K, the company generated $7.5 billion from the iTunes Store during fiscal year 2012. Industry sources say that more than $2 billion of that revenue comes directly from iTunes gift cards. Sources also tell us that existing retailers who sell iTunes gift cards (like Best Buy, Target and the like) usually keep around 13 percent of each gift-card dollar sold.

So that adds up to around, say, a $260 million market size for physical iTunes cards split among participating retailers, of which Facebook will now be an active participant. That pie is small compared to Facebook’s overall revenue ($3.71 billion in 2011), but another digital product with less overhead and high demand is definitely a win for Facebook’s Gifts department. Not to mention the potential boost Facebook’s massive billion-user distribution could give on iTunes gift-card sales overall.

But the biggest takeaway here isn’t in the numbers; it’s in the fact that this deal even exists at all.

Facebook and Apple have had a long, troubled history of working together, particularly when Steve Jobs was Apple’s CEO. Perhaps the most poignant example came when the two companies failed to come to terms on integrating Ping — Apple’s doomed iTunes-based social network — with the Facebook API, due to what Jobs told us then were “onerous terms” that Facebook set forth.

With Jobs’s passing last year and Tim Cook now at the helm, initiatives like Facebook iOS and OSX integration and today’s iTunes Gifts partnership signal a new era in Facebook-Apple relations — just as Cook suggested would be the case onstage at our D: All Things Digital conference this past spring.

The relationship is no doubt still complicated. But Monday’s announcement is one step closer to peace between the two tech giants — just in time for the holidays.

Spencer Platt | Getty Images News

LivingSocial, partly owned by Amazon, will be offering a $10 Starbucks gift card for $5 across the U.S. tomorrow, Reuters reported.

Just two weeks ago, Groupon lost its top national sales executive, who would have been in charge of brokering a deal of this kind.

Starbucks CEO Howard Schultz was an investor in Groupon before its IPO through his Maveron investment firm, and he served as a Groupon director until abruptly stepping down in April.

Starbucks has dabbled in the daily deals space before, having offered a $10 Starbucks gift card for half-off through Google Offers. That was while Schultz was still on Groupon’s board.

Starbucks said it anticipated selling at least one million deals through the latest offering.

The three-year-old company in San Mateo, Calif., follows other big-money rounds, including WhaleShark raising $150 million, CouponCabin raising $54 million and Coupons.com raising $30 million.

Who knew it was so expensive to save money?

FreeMonee’s round was led by Charles E. Ryan, current chairman of UFG Asset Management and former chief country officer and CEO of Deutsche Bank Group in Russia. Returning investors, including Redpoint Ventures, Sutter Hill Ventures, Opus Capital Ventures and Pinnacle Ventures, also participated.

To date, the company has raised $45 million in total.

FreeMonee falls somewhere in between a Groupon and a rewards program, like the ones offered by American Express.

The first time I wrote about FreeMonee, I explained: “The idea piggybacks on concepts that have been in existence for years. Today, credit card companies reward customers with points when they visit certain hotels or rental car companies, so why can’t that be applied on a much wider basis? Why can’t your credit card company track how much you’ve spent at particular retailers, and calculate what rewards you may qualify for?”

The offers don’t need to be purchased in advance or printed out. Consumers automatically get the discount when they use the same credit card that received the offer. The offers can appear in a number of formats, from a Web site to an email or a line item within their bank statement.

While there are a dozen or so companies competing in this general card-linked offer space, FreeMonee has another spin on the concept, too.

They aren’t actually offering coupons, but are handing out gifts. Merchants, retailers and restaurants sign up with FreeMonee to grant consumers $5 or $10, in the hope that they will come into the store and spend much more. Once the purchase is made, a credit appears on the consumer’s card within three to 14 days. Cardholders can’t directly enroll in the program, but must access promotions through their financial institution. By this definition, the company is competing with Wrapp, a social gifting company.

The massive funding round will go toward hiring and to build out the support teams in charge of managing bank deployments.

Here’s the full release:

FREEMONEE NETWORK RAISES $34 MILLION,

MORE THAN THREE TIMES ITS SERIES A ROUND

Fueled by Rapid Expansion with Top Retailers and U.S. Card Issuers,

FreeMonee is Driving Marketing Spend Shift—Changing the Economics of Advertising

SAN MATEO, CALIF. – August 7, 2012 – FreeMonee Network, the world’s first and only provider of consumer gift incentives, today announced $34 million in investment funding led by Charles E. Ryan, current Chairman of UFG Asset Management and former Chief Country Officer and CEO of Deutsche Bank Group in Russia. Returning investors, including Redpoint Ventures, Sutter Hill Ventures, Opus Capital Ventures and Pinnacle Ventures also participated. This round is more than triple the initial $11 million 2010 Series A round and brings the company’s total raise to $45 million. The new funding will fuel FreeMonee’s rapid expansion.

“FreeMonee Gifts are a new class of consumer incentive that will change the economics of advertising forever, marking the death of coupons,” said Gadi Maier, CEO, president and co-founder of FreeMonee. “The FreeMonee promise may seem too good to be true—and our early results extend that perception, with sales lift of 400–700 percent and return on ad spend of 500–900 percent. These amazing results far surpass the performance of existing marketing products, so demand is exceeding our early expectations. The new funds will help us to expand FreeMonee to even more retailers and broaden programs with top U.S. banks and credit card issuers.”

FreeMonee’s product addresses three key challenges facing the market today: retail marketers struggle to drive growth without resorting to brand-eroding coupons or discounts; consumers labor through floods of offers and deals; and financial institutions seek new products to positively engage customers. FreeMonee Gifts are unique consumer incentives that meet these challenges head-on and deliver clear benefits to each group:

1) Retailers generate profitable new sales at scale.
2) Consumers receive relevant and irresistible incentives.
3) Card issuers engage customers while increasing card usage.

FreeMonee Gifts link directly to a consumer’s credit or debit card, delivering cash gifts that can be spent on any purchase at designated stores or restaurants. Unlike a coupon, the consumer is free to spend any amount they want—there are no conditions.

To deliver a no-strings-attached incentive to consumers, that is profitable for retailers, is extremely difficult. FreeMonee invested two years in developing a proprietary Gift Underwriting Engine that matches the right gift, to the right consumer, at the right amount. The results are response rates that are 10–50 times that of traditional promotions or coupons and profitable new sales for merchants.

“FreeMonee is attractive because it is a simple, powerful idea that will change how marketers reach customers. The company should be the beneficiary when marketers shift their ad spend from less efficient vehicles to the FreeMonee approach,” said lead investor Charles E. Ryan. “This is the first really big idea to come along in the retail marketing space in a long time, and I believe it will change the game. I was excited to lead this round, because I want to be part of the sea change in advertising that FreeMonee will create.”

Of the $300 billion merchants spend annually on promotions and direct marketing initiatives, much is wasted because it doesn’t shift consumer behavior. Offers, even in their newest forms, are not motivating consumers to act in a substantially different way. The FreeMonee Gift is proven to be different. Consumers love the simplicity and freedom offered by a FreeMonee Gift and go out of their way to visit the store or restaurant and use that gift before it expires. As a result, more of the dollars spent by marketers go directly into the hands of consumers, creating a far more effective and efficient way for merchants to generate incremental sales.

Since its November 2011 consumer launch, FreeMonee is experiencing rapid growth. FreeMonee currently delivers gifts through partnerships with four of the top eight banks and card issuers, and is in development with several others. Fueled by unprecedented initial results, FreeMonee now delivers FreeMonee Gifts to millions of customers each week from a variety of merchants across 30 categories.

About FreeMonee Network

FreeMonee is changing the economics of advertising by enabling stores and restaurants to attract customers on demand using FreeMonee Gifts. With its unique new consumer incentive, FreeMonee delivers gifts of money directly to cardholders of the largest financial institutions. Customized to precisely match consumer interest, gifts allow consumers to purchase anything they want at designated stores or restaurants—no strings attached. The gifts are made possible by FreeMonee’s proprietary Gift Underwriting Engine, which accurately determines the right gift to ensure the highest level of consumer interest and the best return on ad spend for a merchant. Unlike traditional coupons or offers, FreeMonee Gifts feel like a gift card from a friend—money to spend at places consumers like. For retail marketers, FreeMonee Gifts enable brands to attract large volumes of profitable, incremental customer visits—without discounting. For banks and credit card companies, FreeMonee provides the opportunity to positively engage customers and strengthen loyalty.

Founded in 2009 and located in San Mateo, California, FreeMonee is led by former executives of Google, Visa, Oracle, Cisco, Procter & Gamble and Coca- Cola. To date, FreeMonee has raised $45 million in funding with investments from Charles E. Ryan, Opus Capital Ventures, Redpoint Ventures and Sutter Hill Ventures, among others. Through continued partnerships with the top U.S. financial institutions, the company expects 50 million households to have access to FreeMonee Gifts in 2012. For more information, please visit www.freemonee.com.

Wikipedia

As part of the announcement, Boomerang has secured $1 million from Lightbank, the investment fund created by Groupon’s founders.

The concept behind Boomerang is not entirely new. It works similarly to Wrapp, which allows users to give gift cards to their friends through Facebook. Another similar company, Karma, was recently purchased by Facebook.

CEO and co-founder Zachary Smith says the primary difference between Wrapp and Boomerang is that while Wrapp is working with major chains, such as the Gap and H&M, Boomerang intends on working with smaller local merchants, and instead of strictly giving away gift cards, Boomerang will be selling vouchers for services, such as a meal for two or a kayak rental.

The challenge with that model is that it will have to build out a national salesforce to reach local merchants. Today, it’s launching with 40 Chicago businesses. Next up, it is hiring in New York and Austin, Texas, to launch in those markets soon.

Today’s launch is not the company’s first. It raised $800,000 back in February 2011 to launch a social travel recommendations site called Gtrot. Now it’s coming back around for its second go (and with a better name this time).

Smith said the idea for Boomerang came up while trying to figure out a way to monetize Gtrot. Going forward, the team is entirely focused on Boomerang, even though Gtrot is still attracting users. ”It’s still running on the side, and it continues to have 20,000 active users, but we see a huge opportunity in the social gifting and are focusing efforts on the new platform,” he said.

InsideSocial

Based on one estimate, there are three million food trucks and more than five million food carts in the U.S. A reality-TV show called “The Great Food Truck Race” depicts the drama in setting up shop, and the challenges of making a profit.

So it’s no wonder there’s now an iPad-based solution made specifically for the four-wheeled purveyors.

Revel Systems, a two-year-old San Francisco start-up, has created a point-of-sale system for food trucks and quick-service restaurants. It’s available today, to make accepting ordering and payments as simple as possible.

What’s special about this version is that it allows the trucks to accept orders and charge credit cards with little to no wiring, so kitchen crews in cramped quarters don’t accidentally stumble over or chop their lifeline to the Internet. It also enables them to continue taking orders, even when their Internet connection goes down — because that can happen when moving from one street corner to the next.

“Before, you’d have a router and cabling all around; it was one big mess,” said Revel Systems’ co-founder and CTO Chris Ciabarra. “If you want a printer and a display, where do all the cables go?”

Additionally, the software enables food truck owners to update their location, or offer specials via Twitter.

What’s different about this iPad solution from others, like Square, is that it’s focused on the enterprise customer, Ciabarra said.

As traditional brick-and-mortar restaurants like Popeye’s and In-N-Out Burger experiment with food trucks, they want a point-of-sales solutions that isn’t a one-off, but is able to support franchises, he said. ”The food truck industry is booming. All the brands are trying it out.”

Revel also allows merchants to integrate any payment solutions or rewards and gift card programs, including traditional providers like Visa, MasterCard and American Express, and also upstarts like LevelUp. The software also easily tracks what items are selling well, as well as the things that are the most profitable, so truck owners know which items on the menu to emphasize.

Revel, which was founded in September 2010, launched its first product in beta last summer, and has raised $3.7 million in capital.

The company is charging food trucks $2,000 for the package, which includes the iPad, the cash drawer, a printer, the software and the cabling. Each Internet-connected iPad also costs $30 a month. The enterprise version, which has additional features, costs $3,300, and $100 a month.

That’s a lot of tacos.

I scan my phone to pay for a latte at Starbucks, I snap pictures of checks to make bank deposits. Once, I used it to buy a few screws at Home Depot without ever pulling out my credit card.

But this week, Apple officially announced its first steps into the payments space with Passbook, an application that electronically stores loyalty cards, gift cards, boarding passes, electronic movie tickets, coupons and more on the phone.

Passbook comes out this fall, and Apple hasn’t yet said if it will accept payments or store any credit card information. But based on several conversations I’ve had over the past week, nearly everyone expects that is where Apple is headed.

The truth, however, is that accepting payments is a lot trickier than it sounds. Transferring money responsibly between parties is extremely sensitive. Even for Apple, it could prove difficult to come up with a game changer that would be as elegant as they’d like it to be and make everyone happy.

Passbook

But, for now, Apple’s first step is Passbook.

The point of the application is to make it easier to keep track of gift cards, coupons, passes and tickets and other things that get lost in your wallet or on your phone.

Using Passbook, iPhone and iPod touch owners will be able to call up electronic bar codes on the screen to check in for a flight, get into a movie or redeem a coupon. They will also be able to see when coupons expire, pinpoint where their concert seats are or check the balance of a coffee loyalty card. The app uses location-based services too, so when a consumer is close to a movie theater or store, a ticket or relevant coupon will appear on the phone’s lock screen.

Several partners have already signed up for the program, including Target, Fandango, Starbucks, Amtrak, United Airlines and the W Hotel.

Ticket seller Fandango confirmed in a statement that, with Passbook, “moviegoers can bypass the box office at select theaters with their scannable ticket on their iPhone, and with location and time features, the Mobile Ticket will automatically be displayed for quick and convenient access as soon as the moviegoer arrives at the theater.”

As seamless as it sounds, both retailers and consumers will have to do some juggling to make it work.

Target and Starbucks, for example, have already upgraded their hardware at the point of sale to be able to read a bar code from the phone’s screen. And consumers will have to make a conscious effort to save their coupons and bar codes in the application, much like when they add an event to a calendar.

Already a payment provider

If Apple chooses to build more functionality into the app, it does have a few things going for it.

For instance, on Monday Apple said it has about 400 million iTunes accounts — meaning that the company has that many credit cards on file. To put that number in perspective, PayPal has about 100 million active accounts — a quarter of Apple’s reach.

Another benefit is that Apple owns the phone’s hardware and operating system, so if it needed to tweak something, such as integrating near field communication, it could easily do that in the next generation. NFC is often considered the linchpin to mobile payments because it would enable people to tap to pay at the register, without having to show a barcode.

Complexities abound

On the other hand, turning Passbook into a payments network will not be easy.

The simplest route would be to enable users to charge everyday purchases like groceries and gas to their account with a tap of their NFC-enabled phone. The approach would be similar to PayPal’s business, which allows people to check out online using the credit card it has on file.

But that’s not the kind of game changer that everyone is looking for from Apple.

In our digital lives, today’s consumers want more capabilities, such as being able to make charges to a variety of cards, monitor their account balances, pay bills, make returns and save receipts. Coupons and offers should also be part of the mix, based on a person’s interests.

In building an application that does all that, Google has faced several setbacks with its Wallet app, especially when it comes to partnering with the carriers, banks, retailers and handset makers. In particular, NFC has been slow to get off the ground, and carriers — including Verizon, T-Mobile and AT&T — have blocked Google’s Wallet from appearing on Android phones.

PayPal has made slightly more progress, but it is still working out the kinks in the system. Currently, the company is focused on signing up lots of retailers so it can learn from real-life experiences, in order to make a big push in 2013.

Apple faces these same technology hurdles, and it would have to build a system that addresses the security needs of consumers while also complying with laws in every country in which it operated. The least of its problems may be figuring out a way to make money in payments — or at least not lose money.

Right now, Apple charges companies 30 percent each time they sell anything on iTunes.

That’s a much larger cut than what they could get away with if they extended it to retailers, who are used to paying around 2 percent. Of that much smaller percentage, Apple would still have to pay the processors, such as Visa and MasterCard.

There are other options, too

Since Apple clearly intends for the service to become one of its flagship applications — like Siri, FaceTime or Maps — how else might it address the payments business?

There are a few more options, based on what already exists in the market.

Instead of copying Google or PayPal, Apple could try to compete with Visa and MasterCard.

Better yet, it could steal a page from Square’s playbook. The San Francisco company, led by Twitter co-founder Jack Dorsey, has developed a mobile application called “Pay with Square.” The app allows users to pay by giving the clerk their name at the register — no credit card or fancy NFC-equipped phone required. In advance of the payment, consumers would have to store their account information in the app and take a picture of themselves to make identifying them easy.

In addition, the store must have an iPad at the counter, so the salesperson can correctly identify people from their pictures.

The whole experience is pretty slick — just how Apple likes it. Plus, it could generate additional iPad sales. But there’s a catch. Without a critical mass of retailers on board with the program, consumers would not be able to reliably leave their house without a physical wallet.

Should companies be afraid?

The problem with not knowing what Apple has in store makes it impossible for companies to gauge whether they should be excited about the possibilities of Passbook, or whether they should be scared.

Scvngr’s Seth Priebatsch said that it’s not clear to him, either, but he’s willing to take the risk. He plans to integrate his company’s LevelUp application into Passbook, which operates similarly to Square.

“My feeling is that Passbook is very much like [Apple's] Game Center, in that it’ll be a nice additional distribution channel for all mobile payment/loyalty app developers,” Priebatsch said. “Of course, that could come back to bite us all when — not if — Apple bakes in their own mobile payment solution.”

WhaleShark’s SVP of Mobile John Faith also said that his company would consider integrating RetailMeNot — a coupon app it launched this week on the iPhone — into Passbook.

“Our value for companies like Apple, Google, PayPal and Bing is a partnership where our coupon content can become a part of similar consumer offerings — making saving while shopping with a mobile phone a more seamless experience,” Faith said.

If you take the literal translation of the word “passbook,” it seems to be a play on two words: “Passport” and “checkbook.”

It may be inevitable that Apple enters the payments space, but whether it pulls it off is another thing entirely.

Over the past year, Amazon has slowly been entering that space, aiming to go up against industry-leading Groupon.

So far, it has done fairly well. For example, Amazon is the fourth-largest daily deal provider in the U.S., following Groupon, LivingSocial and Travelzoo, according to Yipit, a deal aggregator that closely tracks the major players.

Starting early tomorrow, the company is planning a publicity stunt to raise its awareness even further, by posting $10 Amazon.com gift cards for five bucks.

The offer will be distributed on the AmazonLocal site, via email and on some Kindle devices, and has the potential to sell out, since limited quantities will be available. (Don’t get too excited, it’s limited to one per customer.)

As part of the promotion, Mark Eamer, a director of product at AmazonLocal, provided a glimpse into the company’s plans in the crowded local deals space (but that’s pretty good, considering the company’s corporate culture to not disclose much of anything).

Offering gift cards is a common way for companies in the space to drum up new subscribers, even though the companies often lose money. For example, last year, LivingSocial sold 1.3 million $20 Amazon gift cards for $10 apiece, Groupon pawned discounts for Barnes & Noble, and more recently, Google offered up gift cards from REI.

Eamer said this represents the first time it has sold gift cards for Amazon.com, but in the past, it has sold deals for other Amazon-owned properties, such as Diapers.com and Soap.com.

Up until now, most of AmazonLocal’s growth has been supported by the $175 million strategic investment it made two years ago in LivingSocial. Nine months ago, Amazon launched its first local deals site in Boise, Idaho, with the help of LivingSocial, and today it operates in 90 markets across 26 states and the District of Columbia.

Eamer said that even now most of the deals listed on the site come from LivingSocial, although AmazonLocal is hiring its own sales team in Seattle and in other locations to help source deals. He declined to say how many people work in the division.

Still, it’s clear that one of Amazon’s advantages in getting merchants to work with them over a competitor is its scale, he said.

Eamer would not disclose how many subscribers have signed up for AmazonLocal, but overall, the company has 164 million active customer accounts worldwide, defined as people who have made a purchase on the site in the past 12 months.

“There’s lots of competitors in this space, and we all want attention from the merchants. By far and away, they [merchants] answer the phone and want to hear what we have to say. We have relationships with millions of merchants around the world, and 164 million customers worldwide. We know how to work with merchants and connect with customers — it’s unique to Amazon.com.”

In the future, Eamer said, AmazonLocal would be open to talking to other providers beyond LivingSocial to bring more offers to the platform. “We would consider it and evaluate that as time goes on, or as another relationship presents itself,” he said.

Amazon’s success in the space is important not just because it is interested in going up against Groupon, but because it uses offers to discount the price of its hardware, including the Kindle e-readers. For instance, a Kindle Touch “with special offers” costs only $99, but one without offers — a.k.a. ads — is $139. In other words, if it can subsidize the cost of its hardware through the use of these offers, it can compete more deftly against Apple and others in the tablet space.

Another goal for the year is to continue to refine its targeting abilities. Currently, offers are only delivered to people based on geography only.

“One of our key tenets is delivering the right deal to the right person at the right time … Our targeting is limited by geography, but we’ll be working on some things in 2012.”

Of course, in the case of tomorrow’s Amazon.com gift card, it will be sent out to everyone.

The company, which plans to launch soon in the U.S., has created a way for people to easily give gift cards to their friends through social channels such as Facebook.

Greylock will contribute $5 million to the company’s first round, increasing the total to $10.5 million. Creandum — along with Atomico, which was founded by Skype co-founder Niklas Zennström — invested in the round last year.

“The gift card industry has grown to a $100 billion industry, and yet very little innovation has been done around social networks and smartphones,” Hoffman said in an interview. “You put those two things together and suddenly you get a much easier way to give.”

The funding will be used to launch the service in the U.S. and the U.K. this quarter, with other markets following.

The social gifting service has three components:

First, people can learn about their friends’ birthdays or other occasions on Facebook, or through notifications on their mobile phones.

Second, users will be able to give friends gift cards that mutual friends or family members will be able to contribute to on Facebook.

Third, Wrapp is partnering with retailers and merchants which will also contribute $5 or $10 to the card.

The logic is that if many people are willing to contribute to a gift card, the gift becomes more meaningful. Retailers are willing to participate because it might drive traffic to the stores and get consumers to buy something that they normally may not have bought.

Wrapp was started 2011 by Hjalmar Winbladh and others, including Andreas Ehn, Spotify’s founding CTO, and Carl Fritjofsson, an advisor to Groupon.se.

Wrapp is currently growing more than 30 percent every week in Sweden, where it is working with more than 25 merchants. Already, 2 percent of the nine million residents there are considered active users of the service.

“It’s certainly showing a great early curve in Sweden, and we have every expectation the curve will be replicated in other places, like the U.S.,” Hoffman said.

According to Experian Hitwise, the top search query the week before Christmas that included some variation of the term “gift card” was for “kindle gift card.” Apple’s iTunes gift card was not even close, ranking as the eighth most searched-for term. In between were several more generic combinations, including American Express or Visa, or terms like “cheap gift cards.”

This holiday season, spending on gift cards was expected to hit $27.8 billion, a four-year high, according to a survey conducted by the National Retail Federation.

The plastic versions of cash were the most requested items on people’s wish lists for the fifth year in a row. What was unusual was the increased number of shoppers who were willing to give them, shedding concerns about looking impersonal or lazy.

The average shopper was expected to spend $155.43 on gift cards, the highest amount since 2007.

Experian theorized that the Kindle gift card, in particular, was searched for so heavily because it made a practical companion gift to the record number of e-readers being purchased. It also said that the increase in gift card purchases drove higher traffic to retailers’ Web sites on Christmas Day, with visits up 31 percent year over year.

But what if you got a gift card you don’t want, or one for a restaurant or theater that doesn’t exist in your hometown?

There’s a secondary market for that.

Companies such as PlasticJungle.com, GiftCardRescue.com and CardPool.com will give you up to 90 percent of the voucher’s value — depending on the demand for the card. Likewise, you can also purchase gift cards for below face value on these sites.

Even better, if you didn’t get a Kindle gift card but wanted one, PlasticJungle and GiftCardRescue both have partnerships with Amazon that will give you an extra 5 percent on the value of the unwanted card if you swap it for an Amazon gift card instead of cash.

Whatever you do, experts suggest you don’t put the cards in a drawer and forget about them. The best deals are being offered now, so spend them.

It’s a far cry from the $30 million round that Coupons.com announced on Monday, which followed a $200 million round in June.

But both companies are following the same premise that offline activities, like couponing, are moving online.

In particular, CouponTrade is targeting the secondary market, where consumers can go to trade both daily deal vouchers from providers, such as Groupon and LivingSocial, and gift cards from retailers, such as Macy’s, Walmart and Old Navy, so they don’t go to waste. So far, it lists inventory for 15 U.S. markets.

The secondary market is already fairly competitive, and in general, they are a bit rogue. They are not working with the major deal providers to prevent fraud, and instead rely on cash-back guarantees, which are often negotiated through payment providers, like PayPal, if a voucher ends up being used or not legitimate.

Others in the space include DealsGoRound, CoupRecoup, CityPockets and Lifesta. Since the company deals in selling unwanted gift cards as well, it is also competing against fairly established players such as PlasticJungle.

CouponTrade said investors include Jeff Cantalupo of Listen, a consulting firm in Chicago, and the Bousis family, who owns and operates the Chicago grocery chain, Cermak Fresh Market.

Terms of the deal were not disclosed.

GMG is a publisher of digital currency cards and works closely with Facebook to manage, distribute, market and manufacture the cards.

The cards, which are sold at major retailers including Best Buy, RadioShack, Target and GameStop, are good for Facebook Credits, which is the digital currency used inside all games on the social network.

The digital currency market is growing as more games are played online for free and give players the option of buying virtual goods inside the game. Rather than having to enter a credit card number online, game cards can be conveniently purchased in cash and redeemed online. Another big player in the industry is Atlanta-based InComm.

Topps, which was acquired and taken private by Michael Eisner’s Tornante Company and Madison Dearborn Partners in 2007, says it will leverage the acquisition to enter the digital currency market, while bringing manufacturing, design and collectibility skills to digital currency cards.

Rob Goldberg, the CEO of GMG, will become the VP and general manager of the digital currency business, reporting to Topps CEO Ryan O’Hara. GMG will represent the company’s third business division in addition to trading cards and confections, such as Bazooka bubble gum.

GMG’s other executives, Tim Pechmann and Jeff Mickeal, will also join Topps.

GMG works with about 45 clients, including the NFL and game companies like THQ.

When it goes public, the Facebook game developer will be the first major U.S. company supported primarily by the sale of virtual goods to do so.

To get an idea of what such an animal might look like, I talked to a handful of accountants, lawyers and game companies to get a sense of what we might find under the hood.

What’s immediately clear is that there are no obvious answers.

The Securities and Exchange Commission and other governing bodies have not yet come up with a legally prescribed method for taking into account the sale of virtual goods.

That leaves companies to come up with their own best guesses.

“There are no rules about this stuff,” said Bob Komin, the CFO and COO at Linden Lab, which operates Second Life, the four-year-old online virtual world. “I haven’t heard anything about a standard, but it’s probably the number one thing we talk about before we get audited every year.”

Revenue recognition on the sale of virtual goods is not exactly a sexy topic (unless we’re talking about an avatar’s undergarments!). But as more companies shift to a free-to-play model, where games are monetized through microtransactions and virtual goods, the subject will become more commonplace.

Zynga may be the first out of the gate, but many others are waiting in the wings — Facebook being the most prominent. Zynga declined to comment for this story.

Here’s what is known about Zynga

Four of its titles dominate the most popular applications on Facebook: CityVille (No. 1); FarmVille (No. 2); its newest title, Empires & Allies (No. 3); and Zynga Poker (No. 4).

All of those games are free and monetized through the sale of virtual goods, such as purple cows, energy boosts, clothing or premium buildings.

In-game items like these are either purchased directly on Facebook or through gift cards purchased in the store. Zynga also makes money from advertising and mobile games, but revenues from those are presumed to be far less.

In total, Zynga reportedly generated about $400 million in profit last year on about $850 million in revenue, although subsequent sources told AllThingsD’s Kara Swisher that the filing will reveal much more robust numbers.

But it’s not the sheer magnitude of Zynga’s business that has created problems for bean-counters. It’s the details on how to account for every last penny.

In a white paper, accounting firm Ernst & Young writes that there are three typical models being used today.

Here’s how they break it down:

• Game-based model: The company recognizes revenue over the life of the game.
• User-based model: Revenue is recognized over the estimated life a user plays the game.
• Item-based: Revenue is recognized based on the implied or explicit life span of the item — in other words, how long it would last in the real world. Examples of more durable goods are virtual vehicles, furniture or weapons. Revenue from these would be recognized for as long as the player stays active in the game. Revenues from a more consumable item, like a virtual cup of coffee or a jolt of energy, would be recognized almost immediately.

And there are still other factors to take into consideration, such as whether the goods were paid for with virtual currency or real cash, and how much information a company has for establishing the averages.

Lack of rules won’t stop companies from filing to go public

It can get really confusing really fast.

Kirk Soderquist and J. Dax Hansen, attorneys at Perkins Coie in Seattle, are looking at the legal ramifications of virtual goods.

“You have a bunch of alternative financial services companies that have sprung up on the Internet around social networks and gaming because there’s a need to deal with money in an innovative way. But the laws aren’t clear on how they apply to the Internet and the gaming space,” Hansen said.

Despite the lack of clear regulations, they said, they don’t believe that’s keeping any companies from filing for a public offering.

The one major aspect for a company to consider is unclaimed property laws. If a user purchases credits or coins but doesn’t use them, a company can’t necessarily set an expiration date and count them as revenue. In many states, it is considered “unclaimed property” — like an unused gift card — and the government can collect the revenue.

“Investors and acquirers will be interested in how you deal with that,” Hansen said. “If they are dependent on breakage for their business model, then they have another think coming.”

Linden Lab recognizes revenue over three years

Linden Lab’s approach for Second Life most closely resembles user-based accounting, which recognizes revenue over the average lifespan of a player, which is three years.

That time frame was picked, Komin said, because players tend to stick around for two to four years. “So, three years is not a bad estimate,” he said.

Komin prefers the long timeline because it evens out the revenues, making the company look like it has a very predictable and recurring business model. “If you have recurring and repeatable revenues over three years, it means that even if you are growing really fast, your reported numbers would be growing less quickly, but it would be more predictable. The other far extreme would be to report everything in the current period, and you’d see the growth as it was happening — but it would be more volatile.”

In other words, if Zynga does the same thing and reports FarmVille revenues over more than the two-year period it has been popular and revenues from Poker over three-plus years, revenues will be very consistent and not reveal much in terms of how well its games are currently performing.

Likewise, sales won’t spike when they release a new title, like Empires & Allies — which has jumped from the seventh most popular game to the No. 3 spot in the past week, according to AppData.com.

The iPhone is an example of the two accounting models

A good example for this is how Apple originally accounted for its iPhone.

When the first iPhone came out, Apple used subscription-based rules to account for the revenue. That meant that sales from the iPhone were spread out over many months, rather than right after a customer bought the phone. Wall Street analysts found the practice annoying because the company’s revenues barely budged despite selling two million devices in one quarter.

Apple was forced to report it this way because it technically wasn’t selling a finished product. Over the life of the product, Apple planned to push down free updates to the device. (This is also why Apple once charged for iOS updates for the iPod touch, so it could recognize all revenue immediately.)

The laws have since changed.

“Apple is a great analogy,” Komin said. And just as Apple figured it out over time, “I think there will be some adjustment as people figure [virtual goods] out.”

To be sure, Komin has his preferences for how he wants to do it, as the company considers an IPO.

“Generally speaking, investors don’t reward you for volatility,” he said. “Recognizing revenue that matches [a user's] life cycle feels better than recording it immediately. But whichever way we go, and whichever we choose to do, we have to make sure investors understand the business.”

Whatever Zynga decides, investors (and journalists!) will thank it for being transparent.

Hopefully, consumers will find it a sweeter deal than last time.

Three months ago, FTD.com offered a Groupon deal of $20 for $40 worth of flowers and gifts on for Valentine’s Day. But the offer was yanked early after users called the deal a scam. The coupon, which was bought by thousands of people, directed buyers to a special website to take advantage of the offer. The problem, users said, was that prices were higher on that site than on the regular website.

This time, the voucher will be applied at the check-out to any regular or sale item found on FTD.com. People can pay $15 for $35 worth of flowers and gifts to be delivered on Mother’s Day. Or, they can spend $12 for $30 worth of flowers for any day after Mother’s Day.

The FTD offer on LivingSocial demonstrates how daily deals are not just for local commerce, but how national brands are increasingly willing to test (and re-test) the effectiveness of driving awareness to their businesses through discounts and mass mailings. (In a separate post today, I write about a day in the life of two local LivingSocial employees who make sales calls in Seattle.)

LivingSocial has run national deals before. In conjunction with Amazon.com, which has invested in the Washingon, D.C., company, it offered $20 gift cards to the e-commerce web site for ten bucks. LivingSocial had a hard time fulfilling the 1.3 million vouchers purchased. It’s also worked with Fandango to sell movie tickets.

This deal also highlights the rivalry and competition building between Groupon, which is the market leader, and LivingSocial, which is smaller but gaining.

Mitch Spolan, who is heading up the effort at LivingSocial as the SVP National Sales, has only four weeks under his belt, having come most recently from Yahoo. Fueling the storyline that LivingSocial and Groupon are in a tight race is that another Yahoo exec, Lee Brown, who Spolan worked with closely, left Yahoo late last year to head sales at Groupon.

Spolan was particularly cheerful last week delivering the news that LivingSocial had a deal coming up with FTD.com, even after its experience with Groupon. To rub it in even more, Spolan brings up another sore subject (although he swore it was an accident).

“Mother’s Day is the Super Bowl of flowers,” he said. “More flowers are sold for Mother’s Day than any time of year.”

Yes, the Super Bowl. The same event in which Groupon rolled out its first advertising campaign that managed to offend its users. It had to yank it (just like the FTD offer).

This deal with FTD will be different, Spolan swears. “We are providing a great deal for our members, and are fully disclosing everything. The offer is available to all the products on FTD.com, and in addition, we put the fine print in plain English. It’s crystal clear before they hit the buy button,” he said.

It’s unclear how the revenues on this deal will be split between the partners.

Typically, half of what the consumers pay for the voucher goes to the retailer or merchant, and half goes to LivingSocial or Groupon. It’s the split that could suffer under steep competition, especially since it’s not always going to be a two-horse race. On a national basis, Facebook and Google have thrown their hats into the ring, along with dozens–if not hundreds–of competitors on a local level.

Spolan’s confident of the company’s leading position.

“If we went back eight months in time, there were two companies that had 90 percent market share and today there’s two companies that have 90 percent market share. On a local level, it’s true, but from a national level, that’s less so. They [the brands] are looking at that market share position.”

In an interview, Rob Apatoff, FTD’s president, told me he didn’t think that the Groupon offer was unfair. Traditionally, consumers haven’t been able to combine multiple offers, so why should it be different in this case? “There was confusion with a group of consumers. We talked to Groupon at the time, and we decided to honor both discounts,” he said. “The consumer got a better deal than the one they signed up for. We addressed it immediately. We let the consumer win.”

The consumer will also win this time because the voucher will be applied to anything on the site, including sale items.

Apatoff said he believes that group buying fits in with the company’s social media strategy, which it is committed to having as part of its marketing mix. But it’s too early to say if they’ll do another offer.

“We’ve been happy with the partners that we are in business with now. We are happy with the company we are keeping,” he said.