O2 has partnered with location services platform Placecast to enable brands to automatically deliver targeted SMS and MMS to more than 1 million opted-in O2 customers in the UK based on their exact whereabouts.

Starbucks and L’Oreal are the first two brands to test the location-based messaging service in the UK for a six-month trial period. The idea lets Starbucks and L’Oreal fence off geographic zones and push SMS discounts to O2 customers who enter those areas.

Starbucks is offering O2 customers 50% off discounts which will be delivered to individuals who have expressed an interest in food and beverage while L’Oreal will offer a Buy-One-Get-One-Free discount on a hair care product to customers interested in beauty.

The partnership between Placecast and O2 is a first of its kind in the UK and one that I find quite interesting. The combination of geo-fencing technology and carrier distribution is a potentially huge way to deliver mobile marketing messages to the consumers who want them.

Check out this great Nike promotion that was run through Twitter and Facebook Places, a perfect example of how real world promotions can be run through social media. Followers of Nike on Twitter were told of a special codeword to use at the Koi Fusion Burrito Truck at a College Football game in the US. They were then required to check-in there on Facebook Places and order the ‘Destroyer Burrito’ which, much to their astonishment, was not a burrito at all, but a Nike sportswear jacket dressed up as a burrito. Brilliant!

Another indication this week that making payments through your smart-phone is the way of the future. Visa has begun piloting a new program in New York that allows users to pay subway, bus and train fares with just a wave of their iPhones.

This follows similar instances of companies embracing smart-phone payments like Starbucks, who recently rolled out their Starbucks Card mobile App which enables users to reload their Starbucks payment cards and pay for their purchases instore through their iPhones and Blackberry’s.

The fact that the likes of Bank of America and Visa are teaming up to help companies adapt to accepting smart-phone payments suggests that it’s only a matter of time until it becomes the norm for people to use smart-phones as a payment tool. As smart-phone ownership increases, expect to see more and more companies trying to facilitate smart-phone payment.

According to Rick Wion, McDonalds head of Social Media, the company were able to increase Foursquare check-ins in stores by 33% with a Foursquare campaign this Spring. The campaign coincided with ‘Foursquare Day’ in April and gave restaurant goers the chance of winning $5 and $10 giftcards when they checked into McDonalds with Foursquare.

The chance of getting something free can be enough of an incentive to get people through the doors and Foursquare seems to be becoming a great way of providing these incentives. The one day campaign cost a grand total of $1,000 which, for a company the size of McDonalds, is evidence that location-based campaigns can be relatively cheap.

There are a lot of sceptics out there who think that there is not much scope for location-based services to actually increase a business’s visitors or sales, that its uses are purely social, but I disagree.

I think there are some great opportunities out there for businesses, both big and small, to increase traffic to their stores by offering freebies or running competitions through location-based services. The chance of a free coffee etc. could provide that little nudge that a customer needs to pick your business over a competitors.