The notion that if you build it, they will come clearly doesn’t work with mobile payments, and Apple Inc. is ready to try another approach.
Nearly two years after launching Apple Pay, the NFC-based mobile wallet has failed to get much traction among consumers, so Apple has begun paying users to sign up in its stores.
In a promotion spanning the U.S. and the U.K., Apple is offering customers an iTunes gift card of $5 (or £5) when they enroll for and make a purchase with Apple Pay at one of its 300 outlets in the two nations. Store associates are driving the promotion by asking customers as they check out whether they’ve enrolled in Apple Pay, offering to walk users through the process.
Harnessing an army of about 30,000 store associates at no extra cost and dangling a cash reward that’s not much more than the price of a latte, the effort could be one of the lowest-cost, highest-reach mobile payments promotions yet.
But there is no guarantee that even this level of hands-on focus on Apple Pay will get major results, judging by previous cash-giveaway mobile wallet promotions.
Since the 2015 launch of Samsung Pay, Samsung has supported a steady string of promotions at shopping malls and other locations offering consumers cash for enrolling a card in its mobile wallet, with bounties ranging from $25 to $100. Some participants got their reward in the form of a gift card; others buying a Samsung handset and enrolling in Samsung Pay qualified for $200 off on any Samsung product. In another promotion, those who activated Samsung Pay gained entry to a sweepstakes.
Google, which offered cash rewards to consumers who tried its first iteration of Google Wallet in 2011, has continued its giveaways with Android Pay with a $20 credit at Best Buy.
Apple Pay has also offered discounts to consumers using its wallet to make in-app purchases, including $100 off on hotel reservations through Hotel Tonight, one of several merchants offering such discounts.
Cash bounties and giveaways succeed in getting first-time trial, but they don’t solve the problem of generating ongoing usage, said Tim Sloane, vice president of payments innovations at Mercator Advisory Group, in an earlier interview.
For Apple, stepping up the game to one-on-one marketing using its associates is the one thing it hasn’t tried, but it could also be the last trick up its sleeve to spark consumer interest as the stakes rise in mobile payments.
Banks supporting Apple Pay agreed to pay Apple 10 to 15 basis points per transaction when the mobile wallet launched. It's the only way banks can offer Apple Pay, because Apple has not allowed access to its NFC chip to outside developers.
Meanwhile, mobile wallet options are expanding for Android handset users. Samsung Pay and Android Pay charge banks no participation fee, and three large North American banks—Capital One, Wells Fargo and RBC—each have a proprietary digital wallet enabling Android device users to make payments directly through the bank's app.
Apple did not respond to queries about how long it plans to continue the promotion.