Where Are the Mobile Incentives?

For years now, the payments business has predicted a mass uptake of mobile wallets, and for years the pundits have been disappointed. Activity via services like Apple Pay, Google Pay, and Samsung Pay has been notably non-overwhelming, despite backing from these tech giants.

Now, another question mark has appeared for mobile payments, this time having to do with the connection between the new dip-and-tap EMV cards, on the one hand, and mobile payments, on the other.

Conventional wisdom in the payments business has long held that the advent and spread of these contactless cards would pave the way for wider use of mobile payments. But research released last month seems to throw cold water on that idea. Indeed, the ease of tapping and the familiarity of plastic could tempt mobile-phone owners away from using a mobile wallet, according to the survey results from New York City-based Auriemma Research.

The firm’s latest Mobile Pay Tracker canvassed just over 2,000 consumers in January and February who were eligible to use Apple Pay, Google Pay, or Samsung Pay. While these consumers are understandably enthusiastic about the experience of contactless connectivity at the point of sale, it’s unclear whether that sentiment will translate into greater use of mobile wallets, the study says.

To be sure, the rollout of new contactless cards meeting new near-field communication standards is far from complete. Major issuers like JPMorgan Chase & Co. have only begun pumping out the cards in recent months. But Visa Inc. has predicted there will be about 100 million cards in circulation in the United States by the end of the year. These are so-called dual-interface cards, which can be inserted into a chip reader as well as tapped at a terminal.

Already, the Auriemma survey indicates 55% of respondents who use mobile wallets agree that contactless-card transactions are faster than mobile payments.

And, while merchants are still installing new terminals that can work with newer contactless standards, that doesn’t pose a barrier for cards, according to Auriemma research director Jaclyn Holmes. If tapping doesn’t work, you can just insert the card, she points out.

But she adds the wallets may have one big weapon, if they will only deploy it: rewards for usage. Apple Inc., for example, has until recently been notably reluctant to promote Apple Pay with incentives, but that seems to be changing with its new Apple Card alliance with Goldman Sachs Group Inc.  Set to debut this summer, the new digital Apple Card will offer cash-back incentives.

When it comes to mobile payments, rewards make all the difference in adoption and usage, Holmes says. Are the wallet panjandrums listening?

—John Stewart, Editor, john@digitaltransactions.net