It looks like Apple Pay is getting into the loyalty game. Considering that everyone is trying to grab a share of the mobile payment world, a loyalty program certainly makes sense, though I have no idea what it will look like. According to this New York Times article, we should know next month:
Apple is preparing to announce details about enhancements to Apple Pay at its software conference next month. Those include a rewards program for the mobile wallet service, said two people briefed on the product.
Call me a curmudgeon. I like my iPhone just fine, I just haven’t really spent any time getting Apple Pay set up. Pulling a credit card out of my wallet doesn’t seem that complicated to me. Make no mistake, though. Mobile payment is the future. It’s viewed by many in the payment industry as more secure than a credit card. And, with the move to cards with chips in them, the card issuers are searching for ways to reduce the vast amounts of money they spend on fraud.
But, for companies like Google and Apple, it’s about expanding their footprint. Apple has already demonstrated that they want you to be able to do everything except bake a cake with your iPhone (though they probably have people trying to figure out that cake thing).
If Apple Pay catches on in a big way, Apple can sell more iPhones at a high margin, something they’ve done very well with. That means they can sacrifice profitability on Apple Pay by rebating you some portion of the fee they’re charging to entice your loyalty to their platform.
And, that’s where I finally get interested. Since I already have the primary instrument (an iPhone) in my pocket, it won’t be hard for me to motivate to use Apple Pay. And, since Apple built the product on new technology as opposed to having to deal with the spaghetti of an old payment network, I’m guessing they’ll have more ability to target promotions. I’ll be interested to see if they plan to reward total dollars spent or if they get imaginative to encourage you to spend at more merchants, use Apple Pay more frequently at a specific merchant, etc.
I also think there’s a wealth of knowledge they can share with the merchants who accept Apple Pay if the loyalty program influences customer behavior (it will). I’d be willing to bet that the merchants will ultimately pay Apple to drive customers to their stores/websites.
Google’s going to get into the loyalty game because Apple is. And, Amazon will surely follow. That’s good for customers. I’m just hoping for a robust list of redemption partners.
Are you using Apple Pay now?
Will a loyalty program cause you to use it more?
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