Notes on Loyalty: Apple Pay, USAT, VeriFone, FIS

Payments companies are taking strides toward integrating rewards for everyday purchases into mobile wallets, while making it easier to redeem those rewards at point-of-sale terminals.

Last month, vending-payments specialist USA Technologies Inc. said it is integrating its MORE. loyalty platform into Apple Pay. The deal is designed to induce more consumers to use Apple Pay at almost 300,000 vending machines that use USAT’s contactless-payment technology and to encourage them to use the MORE. program.

The integration enables consumers using Apple Pay to enroll in the loyalty program with relative ease. That’s because the program can access data stored in the Apple Pay wallet, says Amelia Powell, senior director of marketing and strategic partnerships at Malvern, Pa.-based USAT. “Now, with the Apple Pay integration, they can use whatever card is in their Apple wallet,” Powell says.

Consumers not already in the MORE. program also receive a prompt on their iPhone or Apple Watch displays to join, again using data stored in their Apple Wallet for provisioning. Powell says the ease of joining the program, based on information already stored in the Apple wallet, should boost registrations.

The MORE. program enables USAT and vending operators to send offers to consumers. Local operators can send specific offers to their machines and locations, while USAT can send national offers, such as for a brand discount or reward. Participation in the MORE. program carries a fee for customized offers, but no charge for participating only in the national program administered by USAT, Powell says.

The overall goal is to induce more transactions at vending machines. “We have found that unattended payments are a gateway to using a mobile wallet,” Powell says. In 2016, promoting Apple Pay use at vending machines produced 37% growth in sales at these machines, according to USAT.

Testing of the MORE. program and Apple Pay integration begins in coming months, Powell says. Vending operators can rebrand their program, too. USAT also is working with Urban Airship, a mobile marketing company, on offers for use during the test.

If loyalty programs are the key to boosting usage of new payments methods like mobile wallets, ease of rewards redemption could be even more critical. Last month, terminal maker VeriFone Systems Inc. took a step in that direction by expanding the reach of its Points Redemption app, which allows consumers to cash in loyalty points at VeriFone terminals as they check out, and without slowing down the checkout flow.

San Jose, Calif.-based VeriFone said it is working with processor Fidelity National Information Services Inc. (FIS) to let users of FIS’s Premium Payback Network redeem their card-linked loyalty points toward purchases on the spot. Jacksonville, Fla.-based FIS says its loyalty network enables redemptions for 8.5 million consumers using cards from some 3,100 banks. “Thousands” of gas stations nationwide are linked to the network, the company says.

“Today’s consumers have been digitally empowered and expect tomorrow’s payment and rewards capabilities today,” said Bruce Lowthers, executive vice president at FIS Global Retail Payments, in a statement.

Numbers cited by VeriFone and FIS indicate that loyalty points worth as much as $16 billion are left unredeemed annually. At the same time, nearly 20% of Premium Payback Network users have chosen merchants because of the ability to redeem their rewards, FIS says.

Terminals running the VeriFone app display a prompt asking customers if they want to redeem points toward their purchase earned on the card they’ve dipped, swiped, or tapped. The integration with FIS is provided by a payments hub from Richardson, Texas-based ModoPayments LLC.

—Kevin Woodward and John Stewart