Mobile Payments Has Not Fulfilled Its Promise To Provide More Value

by Sarah Grotta 0

The payments industry has not yet gotten mobile payments right. The lack of customer exuberance for paying with their phone is all the evidence needed. One of the reasons why is the inability to cleverly and simply connect payments and loyalty together. As an article in ARC describes, even those payment apps that have tied loyalty to payments have a long way to go:

The promise of digital wallets has long been to aggregate these loyalty cards in one place and make it easy for people to get the rewards they earn without the need to remember an account number, password or carry around a dozen brand-specific cards in their wallets.

This week, Walgreens took a step in that direction by adding its loyalty program to Android Pay. Walgreen shoppers should be able to just add the loyalty program to their Android Pay wallets and it will accrue loyalty points every time the person taps to pay at a Walgreen console.

But that’s not the way Walgreens will work on Android Pay (or how it already works in Apple Pay). First, to add my Walgreens loyalty card, I need to actually scan the card’s barcode with my Android Pay app. Next, to pay with and apply my loyalty rewards at checkout, I tap the console, which will then prompt the terminal to tell me to enter my Balance Rewards number on the console. Then I have to tap (again) to pay.

The era of the Pays, so far, has not yet fulfilled the original promise: that mobile payments would be more valuable to both the consumer and the merchant than the system of charge cards and cash. Mobile payments are not easier and (so far) they do not provide more value to the consumer.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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