February 24, 2017
By John Stewart
It has become an article of faith that mobile payments capability alone won’t excite consumers. The challenge lies in how to meld loyalty with payments in a single tap at checkout for multiple retail chains. On Friday, Urban Airship Inc. announced an integration of its Reach loyalty platform with Apple Inc.’s iPhone-based Apple Pay service that could meet that challenge. And a spokesman tells Digital Transactions News the Portland, Ore.-based company, which automates loyalty programs for brands including Adidas, Alaska Airlines, The Home Depot, NBC Universal, Sky Media, and Zillow, is working to support Alphabet Inc.’s Android Pay service as well, though it has no details to announce yet.
A consumer makes a combined Apple Pay payment and loyalty transaction at a vending machine.
Urban Airship’s first client for the Apple Pay loyalty integration is USA Technologies Inc., the Malvern, Pa.-based developer of a contactless-payment system deployed on nearly 300,000 vending machines. USAT is leveraging Urban Airship’s platform as well as its own MORE rewards program. The two companies will demonstrate the loyalty integration next week at Mobile World Congress, a mobile-technology exhibition taking place in Barcelona. Further clients could be on the way. “We’re in discussions with a lot of different brands,” says the spokesman.
The key is a set of industry-standard value-added service protocols for information exchange supported by the Reach platform, the spokesman says. That allows clients to switch on single-transaction loyalty and payments at the register, on the Web, and in-app without weeks or months of development work. “This is the first time a technology solution is available that can do a lot of the heavy lifting without the brands having to do it,” says the spokesman. “Now, the local coffee shop with a punch card can go mobile.” The company did not indicate whether any retail brands have yet signed on to leverage its Apple Pay connection.
"Apple Pay is unlocking massive marketing value for brands as loyalty cards top the list of things consumers want in their wallets and provides a dramatically easier and speedier checkout experience that extends reach well beyond the register," said Brett Caine, chief executive and president of Urban Airship, in a statement. "The opportunity for growth could be as monumental as the Web, or apps, or email coming into existence."
Using value-added service protocols at checkout, the Reach platform supports: automatic display within the Apple Pay app of digital versions of the user’s payment and loyalty cards; redemption or addition of loyalty points with payment; and automatic provision of a prefilled enrollment form in cases where the user doesn’t have the merchant’s loyalty card.
While some individual retailers like Walgreen’s have enabled loyalty for Apple Pay transactions, the mobile wallet has remained largely a payment device. Now, some observers see that changing. “Urban Airship’s integration significantly improves the overall value proposition of Apple Pay for merchants by evolving it beyond a payment instrument. Specifically, it helps position Apple Pay as more of a customer-acquisition and loyalty tool,” says Jordan McKee, senior analyst for mobile payments at 451 Research, a New York City-based information-technology research and advisory company.
The integration could be coming at a propitious moment. McKee says nearly 20% of respondents in a 451 Research consumer survey cite “points automatically added to my loyalty/rewards card” as the most important factor that would encourage them to start using a mobile wallet.
Among the major third-party mobile wallets, Android Pay has had single-tap payments and loyalty functionality since Alphabet’s Google unit acquired the technology from the defunct Softcard mobile-payments service in 2015.
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