Eye on Mobile Payments: More Merchants Take Wallets; Walgreens Brings Loyalty to Android Pay

By Kevin Woodward
@DTPaymentNews

Mobile payments continue to garner merchant interest as more retailers are accepting mobile wallets, research shows. Meanwhile, drug-store chain Walgreens is making its loyalty program available to users of Android Pay.

Thirty-four percent of small businesses accept mobile payments like Apple Pay and Android Pay, finds the Small Business Health Index released Monday by merchant lender CAN Capital Inc. That is more than double the 15% who said they did in April 2015. The survey is based on 1,000 responses from small businesses that use CAN Capital services.

The significant increase in merchant acceptance may help meet consumer expectations for mobile payments. A recent 451 Research LLC survey found that consumers increasingly expect their electronic payments to work across channels, including mobile in-store and online.

As the CAN Capital survey found, one problem area in meeting that expectation is that 73% of small-business owners say their current point-of-sale systems are not EMV-compatible. Often, when these systems are made EMV-compatible, the POS hardware includes mobile-payment acceptance technology in addition to EMV and magnetic-stripe card capabilities. Without contactless EMV technology, merchants generally use barcode readers to interact with customers’ mobile devices.

In related news, Walgreens, a unit of Walgreens Boots Alliance Inc., says consumers can use its Balance Rewards loyalty program natively in Android Pay, the mobile payment service from Google. Walgreens says there are more than 85 million Balance Rewards users.

The integration eliminates the need to separately scan a card or enter a Balance Rewards card number during the checkout process.

Walgreens integrated the rewards program into Apple Inc.’s Apple Pay in November. Apple announced last year it would support retailers’ loyalty programs.

Earlier this month, Walgreens rival CVS Health Corp. launched a mobile wallet within its shopping app. The wallet app includes CVS’s ExtraCare loyalty program, which the company says has 70 million members.