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Consumers who use their Samsung Pay mobile wallets to make a payment will be rewarded for their transactions with the debut this week of Samsung Rewards.
Announced Monday, the program enables consumers to earn points for their Samsung Pay transactions, which can be redeemed for retailer gift cards, prepaid Samsung Rewards Visa gift cards, other Samsung products, and other items. As transaction frequency increases, the consumer’s account advances to a higher level, which earns more points. Samsung Rewards is not tied to a specific card stored in the Samsung Pay wallet. More than 500 credit and debit card-issuing banks support Samsung Pay.
Samsung Rewards debuts at a time when despite all the publicity surrounding mobile wallets, consumer usage remains elusive for many wallet sponsors. A lack of value, a crowded market and consumer aversion to risk impede their adoption, a Fitch Ratings Inc. analysis found.
Mobile-wallet operators have been addressing the problem by adding loyalty and rewards program support, and in the case of Samsung Pay, incorporating e-coupons directly in its app. Samsung Pay also will become available for Web-based transactions in 2017 using MasterCard Inc.’s Masterpass service. Google’s Android Pay also will add that capability, but also work with Visa Checkout from Visa Inc. Apple Pay is available for Web purchases, too.
Such efforts are intensifying the contest between tech firms and card issuers for ownership of the consumer, says Jordan McKee, senior analyst for mobile payments at 451 Research LLC, a New York City-based advisory firm.
“The introduction of Samsung Rewards is a particularly concerning development for issuers, who are being further relegated to dumb pipes in the eyes of users,” McKee says via email to Digital Transactions News. “By launching its own rewards program, Samsung places emphasis on loyalty to the wallet itself, rather than the cards within the wallet. This underscores the disintermediation threat that third-party mobile wallets will continue to pose to issuing banks from a customer relationship standpoint.”
Samsung, however, says its rewards points are in addition to any that an issuer may offer.
“Samsung Rewards also allows you to ‘double dip’ on rewards points—that is, with every credit card purchase made via Samsung Pay, you may be able to earn points, miles or cash back from your card’s issuer, as well as points toward Samsung Rewards,” Nana Murugesan, vice president and general manager for services and new business at Samsung Electronics America, says in a blog post. “What’s more, debit cards don’t usually have any sort of points system. But thanks to Samsung Rewards, you can now earn rewards points when you use your debit card.”
Samsung says its rewards program in coming months will expand to more of its products.
