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Apple Inc.’s “Lose your wallet” Apple Pay promotion apparently paid off handsomely for Square Inc.
The promotion, which ran June 23-25, saw 36 local merchants in two San Francisco neighborhoods offer discounts or free items with a purchase when consumers paid for the purchase with Apple Pay, the brand’s mobile-payment service. Twelve of these merchants were Square sellers. “Lose your wallet” is the first known offers promotion sponsored by Apple.
Square says that, on average, more than 30% of the purchases were made with Apple Pay via the Square contactless reader, which also accepts EMV chip card transactions, during the promotion at its merchants. Square did not disclose the average for Apple Pay transactions on a typical weekend at these merchants.
“This is the first time Square has taken this approach, but it’s been one of our most impactful events as it related to consumers paying with their phone[s],” Square says.
The San Francisco results mirror those of other promotions that Square has been involved in. During a campaign in Portland, Ore., in 2016, the percentage of card transactions from contactless payments tripled over the course of the campaign, Square says. Similar increases continue to occur at major festivals and pop-up events.
For its part, Square says the promotion shows how a combination of seller concentration—multiple merchants that accept contactless in a tight geographical area—and employee education in the latest payment technologies can boost contactless usage by consumers. Part of the education includes how to influence consumers to change their behavior, too.
Offers and rewards are viewed as critical to fostering mobile-payment adoption among consumers. Samsung Electronics Co. Ltd., another big consumer electronics company vying for mobile-payments users, has coupled offers and rewards to its Samsung Pay service. It launched Samsung Rewards in November.
Consumer incentives have long been used to promote contactless payments use. Apple, for example, announced Friday it would donate $1 to the National Park Foundation for every purchase made with Apple Pay at an Apple store, online or in-person.
Samsung, in conjunction with digital-coupon provider Quotient Technology Inc., enabled Samsung Pay users to search for, save, and redeem electronic coupons from Quotient’s retailer partners directly within the app.
In addition to the consumer promotions, Square has run a merchant campaign that earlier this month saw the acquirer offer a $20 discount on its $49 contactless and EMV reader. It offered a $350 processing credit for Apple Pay transactions. At Square’s usual 2.75% transaction pricing, a merchant would have to process nearly $13,000 in Apple Pay volume to reach the $350 limit.
Square says it wants its sellers, many of which are small and mid-size businesses, to have the same payments technology that larger merchants can afford. “The results of this past weekend are a positive sign that local business owners want to offer this new technology to their customers,” Square says.
