While many app developers are trying to replicate Foursquare’s success in the location-based arena, most won’t succeed because of their inability to monetize their apps. Developers can charge for their app, but most elect to the ad-supported model to try and reach the widest possible audience. The problem is the lack of mobile commerce infrastructure for connecting advertising and payment on mobile devices with local merchants.

Location based apps know a lot about their users. The very fact that they know a user’s location gives apps the opportunity to serve relevant geo-targeted ads. If a single, male, 24 year old-user checks in at a restaurant, a nearby bar could offer a  discount on after dinner drinks.

Only now there is the messy affair of presenting your phone to a bartender who doesn’t know about the discount and has trouble manually applying it on the point-of-sale terminal. The solution would be for mobile payment systems to integrate with POS terminals and provide an API for mobile developers to use.

People in the United States don’t use mobile payment because it isn’t easy. If I’m given discounts by Foursquare that can easily be redeemed at relevant local stores, I’ll use Paypal, Amazon, Venmo or another easy payment system.

If the system is simple to integrate with the POS and operate, local businesses will advertise this way because they only pay if app users become customers. Business owners will be able to advertise more because they’re paying for successful customer acquisitions. If apps developers successfully gets users to use local business. app developers will be able to make money and verify conversions because users will apply discounts through the app.

The problem with in-app mobile advertising is it’s not connecting click to mortar properly. If ad servers present app users with relevant targeted promotions and discounts, they will begin to use mobile payment services at local merchants. Mobile app developers need to be given the proper tools to make their apps relevant to local merchants. Those tools need to give those local merchants the ability to increase sales.

There is a real opportunity for a startup to provide the infrastructure for true mobile commerce. Elon Musk, Dave McClure and the other Paypal guys seem to be having a lot of fun with the money they made from an online commerce infrastructure play. Mobile commerce is local and online, which is why the mobile commerce infrastructure opportunity is even bigger.