Insight: Without loyalty, Apple Pay is missing the mark

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By: RickFerguson |

Posted on March 4, 2016

Over at Payments Source, Cardfree CEO John Squire argues that, by falling short on seamless integration of loyalty programmes into Apple Pay, Apple is not only preventing adoption of Apple Pay, but as the early leader in mobile wallets is also preventing mass adoption of mobile payments. It�s a bold clarion call for Apple to get on the stick.

Here�s the money quote from Squire�s opinion piece:

Apple needs to take cues from the retailers so key to their success: integrated loyalty and seamless ordering. Integrating legacy loyalty platforms into Apple Pay is far from seamless and the customer experience is no better than the status quo. Walgreen�s was the first retailer to integrate its loyalty programme with Apple Pay, but it still requires two separate taps to complete the transaction. Not exactly user friendly.

Other key points from the article:

  • Apple Pay is not living up to expectations. Being the early leader in adoption brings expectations, and so far Apple has failed to live up to them with increasing numbers of adoptees.
  • Usage by early adopters is slowing. Squire points to a recent First Annapolis survey that shows regular Apple Pay usage by adopters is slowing. �Clearly Apple Pay is not presenting an overwhelmingly great value proposition to customers if their usage decreases over time,� Squire writes.
  • Apple Pay�s problems are those of NFC payments. Like all NFC-based payment systems, Apple Pay suffers from the systemic challenges of lack of data available to merchants and no turnkey loyalty integration.

The Bullet Point: Like Squire, we believe that existing, successful merchant-owned payment platforms such as Starbucks demonstrate the value proposition most likely to attract mass adoption: seamless loyalty integration and a frictionless payment experience. Absent a concerted effort by Apple or one of the other mobile payment platforms to speed development, retailer-focused initiatives, such as Walmart�s development of its own proprietary payment platform, will lead to a potential balkanization of the mobile payments landscape, with consumers forced to load a different payment app everywhere they go. In that environment, the good old-fashioned plastic payment card�which works everywhere�will continue to reign supreme.

Read the rest of Squire's article here.

- Rick Ferguson

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