Apple's Apple Pay Announcement And Possible Loyalty Program
By Brianna Ahearn, contributing writer
Fresh from its annual media event, which this year announced the long-awaited iPhone 6 and iWatch platforms, there are now reports of a possible Apple loyalty program that would be rolled out with Apple Pay, furthering Apple's partnerships with retailers and banks.
On Tuesday, September 10, Apple revealed that it is moving into the mobile payment arena by launching its own wallet application, called Apple Pay, a contactless payment system designed to limit the number of loyalty and credit cards a consumer needs to carry. With Apple Pay consumers wave their phone instead of swiping their credit card. Apple touts the system as ultra-secure because it does not show the cashier, or Apple, credit card numbers or security codes. Instead each purchase uses a unique one-time only number to transmit the information.
“Security and privacy is at the core of Apple Pay. When you’re using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud,” says Eddy Cue, Apple’s senior vice president of Internet Software and Services.
Banks and credit cards which support Apple Pay include MasterCard, Visa, American Express, Bank of America, PNC and Citi, while the first retail partners are Walgreens, Duane Reade, Whole Foods, Macy's Disney Resorts, Disney Store, Sephora, Staples and Bloomingdales. Restaurants are also on board with Apple Pay.
Bank Innovation is now reporting that Apple has been in talks with IHG International, the global hotel chain, to create a partnership for a loyalty program. The program would likely give consumers money back or other benefits based on how much money they spend with Apple and its partners. Job advertisements recently posted by Apple point to the loyalty program containing a tie-in with iTunes.
Little is known about the parameters of the deal with IHG or the scope of the program, but a loyalty scheme would be desirable for retailers who want access to the iOS user base. Apple consumers generally spend more money than Android users and are highly coveted for this reason. A loyalty program may also provide the company with another exclusive that will convince consumers to adopt Apple Pay. This is believed to be crucial since many other “wallet” type applications such as Google Wallet have been disappointments.
One scenario for the loyalty program would have consumers tracking their loyalty points through iTunes, then redeeming them for products and services within Apple's ecosystem. Consumers have been reluctant to replace plastic cards with digital wallets, but the sheer numbers of iTunes and iPhone users could see Apple succeed where Google and Isis wallets have failed.