Apple Taps Blackhawk to Solve Loyalty and Gift Card Problems

by Ben Jackson 0

Open-loop mobile wallets have struggled to reach the levels of use that closed-loop wallets have because the typically do not offer the same kinds of rewards. Starbucks Coffee Co. remains the leader in mobile payments, but Apple Pay is trying to catch up with the help of Blackhawk Network.

Apple addressed a glaring hole in Apple Pay on Monday, when Blackhawk Network announced that it will integrate gift cards, e-gifts, loyalty and rewards programs into the mobile payment system.

The partnership between the two companies will enable Apple Pay users to make payments using prepaid and gift cards, and will also allow users to earn rewards and loyalty points from participating merchants, according to a press release from Pleasanton, California-based Blackhawk.

Despite this addition, Apple Pay will still face stiff competition from closed-loop apps. For companies like Dunkin’ Donuts, Starbucks, and Cumberland Farms, a closed-loop mobile app lowers payments costs and allows the ability to offer richer rewards to consumers.

Overview by Ben Jackson, Director. Prepaid Advisory Service at Mercator Advisory Group

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