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Apple Makes an Offers Ploy To Drive Apple Pay Use
June 19, 2017

By Kevin Woodward

Apple Inc. is sponsoring its first known offers promotion for Apple Pay users with deals available June 23-25 in two San Francisco neighborhoods.

An image from the Apple Web site promoting the upcoming Apple Pay offers.

Dubbed “Lose your wallet” on Apple’s Web site, the promotion includes a percentage off the purchase or a free item with a purchase. The promotion also includes in-app offers, such as $5 off a Caviar order and special offers at a Square Inc. pop-up store. Square owns Caviar.

Square will be in both neighborhoods, helping consumers ensure Apple Pay is set up on their iPhones and they know of the local offers, a Square spokesperson tells Digital Transactions News in an email. Of the 36 merchants participating in the promotion, 12 are Square sellers, Square says.

Despite an overall low percentage of electronic payments being made with Apple Pay, or its rivals Samsung Pay and Android Pay, competition among the three is unabated.

Samsung Electronics Co. Ltd.’s Samsung Pay enabled the ability to search, save, and redeem electronic coupons within its app in 2016. Earlier this year, Google, the Alphabet Inc. unit behind Android Pay, added the capability to transmit loyalty cards and offers to merchants at the point-of-sale terminal.

All three must compete against a slew of retailer-backed mobile-payments services, like Walmart Pay and Kohl’s Pay. Each of these present offers unique to their stores along with easy of payment.

The “Pays,” as Apple Pay, Samsung Pay, and Android Pay are often collectively called, counter the retailers’ wallet offers with those from multiple sellers, especially among those with frequent, and often repeat, purchases. That’s one reason USA Technologies Inc., a vending-payments specialist, favors contactless payments.

“Tellingly, many of the merchants participating in Apple’s promotion reside in high purchase-frequency categories, such as quick-serve restaurants,” says Jordan McKee, principal analyst for payments at 451 Research in Boston. “The initiative is designed to drive user familiarity with using Apple Pay at merchants best positioned to drive reoccurring use and habituation.”

While Apple up to now has avoided offers-and-reward promotions for Apple Pay, another role Apple may be trying to develop is that of a partner. “Apple Pay’s promotion can also be viewed as an attempt by Apple to broaden its image as a merchant partner,” McKee says. “It understands that in order to grow, close collaboration with merchants in areas like loyalty and rewards will be foundational to success.”

Indeed, loyalty is a critical component of Apple Pay’s interaction with Urban Airship Inc., which automates loyalty programs for brands like Adidas, The Home Depot, and Zillow.

“The Apple Pay team wants to be able to point its potential partners to examples where it has helped a merchant increase customer visit frequency or ticket size,” McKee notes. “Events like the one being held in San Francisco will help in establishing and communicating that narrative.”

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