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Apple Pay to link to loyalty cards and roll out in the U.K.

June 8, 2015 03:16 PM
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(Bloomberg) -- Apple Pay will link to some stores’ loyalty cards and be available in the U.K. next month as the company expands the reach of its electronic-payments system.

Pinterest and the Discover Card also will work with Apple Pay, Jennifer Bailey, the head of the system, said Monday at Apple Inc.’s annual software developer conference in San Francisco.

The company is adding store debit cards to the system, which will be available in more than 1 million locations starting next month, she said. Searches in Apple’s updated Map application will indicate if merchants support Apple Pay.

In the U.K., Apple will roll out the payments system at 250,000 locations, including public transportation, next month.

Chief Executive Officer Tim Cook is relying on new services such as Apple Pay to expand the company’s digital footprint and encourage people to stay with its products. Apple is fighting against Google Inc., EBay Inc.’s PayPal and others in a market that is likely to process $67 billion worth of sales this year and may increase to $142 billion by 2019, according to Forrester Research.

Apple Pay, which essentially transforms an iPhone 6 and 6 Plus into a digital wallet, was touted as being an easy way for consumers and retailers to enter a new world of consumption. The biggest U.S. banks and credit-card networks are using Apple Pay to help accelerate adoption of mobile payments while maintaining control of their transactions.

Customer Loyalty

One feature that has been missing from Apple Pay is support for merchants’ customer-loyalty programs.

Integrating coupons and rewards programs “could add value simultaneously to brands and consumers,” Thomas Husson, an analyst at Forrester Research, said by e-mail before the announcement. “That would be a smart move beyond payments and a way to deliver a better shopping experience.”

Google, which already had a struggling mobile wallet, unveiled Android Pay at its developer conference late last month to challenge Apple’s service. Android Pay will be available later this year and will link up with loyalty programs. Samsung Electronics Co. has previewed its Samsung Pay mobile-transaction system, which will be available in the third quarter in the U.S. and South Korea.

In the U.S., Apple Pay, which uses short-range wireless signals known as near-field communications, only works at stores that have upgraded their checkout-line payment systems. Apple said in March that the service was supported by 2,500 banks in the U.S. and about 700,000 locations.

 

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