Discover plugs into Apple Pay for a digital spin on rewards

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Discover joined Apple Pay nearly a year after the mobile wallet came to market, so it has some catching up to do if it wants to be the top-of-wallet choice. Its new in-app rewards feature may give it the visibility it needs.

Customers who buy anything with a Discover card via Apple Pay may choose to redeem rewards toward the purchase, Discover said in a Wednesday press release. To qualify, users must add a Discover card to Apple Pay and use that card. If the purchase amount is lower than the user’s Cashback Bonus balance, the transaction appears as a statement credit within two business days, according to Discover.

Even if they use rewards points to pay for the item, Discover card users still earn the usual Cashback Bonus rewards on the purchase, Discover explained in its announcement.

Many card issuers offer in-app rewards redemption for cash, but this marks the first time a major credit card issuer has built Apple Pay into its rewards-redemption menu, Discover said.

The move more tightly integrates shopping with rewards-redemption, and gives consumers more control, said Brian Riley, director of card services at Mercator Advisory Group.

“Discover makes it easy to see and redeem available rewards all within the app, instead of some other programs and cards where the process sometimes takes more steps and more time,” Riley said.

Discover has a similar streamlined approach enabling customers to use card rewards to pay instantly at the checkout at, and consumers have long had the option to redeem card rewards for cash as a statement credit or an electronic bank account deposit.

“Discover has refined its technology to cut out steps for consumers using rewards for in-app purchases, and while it’s a positive for Apple Pay, it’s not a game-changer—Discover offers a lot of deals and rewards-redemption options,” Riley said. “It’s still not real-time rewards, but on a net basis, it’s very good."

The deal is only good in the U.S., but there is no limit on the purchase price of items eligible for redemption, Discover said.

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