Apple Pay is here and, if you have a credit card issued by participating US banks, it works internationally. However, this is just the start: Apple will allegedly be launching, claims Bank Innovation’s Ian Kar, an Apple Pay loyalty program as early as this year.
While some industry watchers may have projected a loyalty program for some time next year, Digiday’s sources spoke about an Apple Pay monetization strategy, which is pretty accurate according to a source close to Apple, and also confirmed by others within the company.
You may recall that Apple is keen on revitalizing iAd with a new feature that sounds appealing for marketers: ad retargeting, which practically allows marketers to retarget users based on their in-app activity. If an iOS user is watching an item in a retailer’s application, but opts not to buy it, the retailer can retarget the same user with a mobile buy button ad for that same item (on the user’s iDevices).
Now imagine that feature combined with Apple Pay: we will soon see Apple play catchup with Facebook and Twitter.
As regards Apple’s loyalty program Bank Innovation says it will probably use iBeacon, due its ability to pass richer data (see this patent).
A source speaking to Bank Innovation (in August) explains how Apple Pay loyalty program works:
One way they’ve [Apple] thought up is, say you’re in a Duane Reade, hypothetically. You get a push notification from Pepsi that they’ve worked out a deal with Duane Reade that you can get a free case of Pepsi. Just pick it up and use Apple Pay at the counter.
The fact is, a loyalty program could drive up user adoption of Apple Pay — as well as iPhone 6 sales — but to achieve that Apple needs partners. We will wait and see what Apple has prepared for the holiday season.