Merchant Innovation

The Lure Of Payments For The Holidays

Retailers always get all of the attention, especially at Christmas.

The reason is simple, retailers sell “what” we buy, and at this time of year that “what” is presents. According to estimates, holiday retail will bring in around $200 billion in 2014, a 5 percent uptick from last year. The vast majority of that spend will be gifts, Gallup reports that, on average, Americans will spend around $730 apiece for Christmas presents this year, though the same survey finds that the largest individual group of shoppers was actually those who intended to spend over $1,000 – as that represented 25 percent of responders.

Presents are by far the most fun part of the holiday season, and so the focus of what consumers are buying with that $200 billion is natural, though it tends to obscure an interesting question about how consumers are paying. They have many options – plastic card, digital wallet, paper check and the tried and true classic – cash, and many providers of all trying to woo them.

So, who made the most interesting efforts this year? PYMNTS has the list right here, we’ve checked it twice and we’re pretty sure who’s trying extra hard to be nice.

AmEx Loves Small Business

It wasn’t that AmEx didn’t reward consumers for shopping at the big stores – AmEx card customers got a 20 percent discount from Banana Republic, Sony and Cuisinart through the card’s membership rewards program during late November. But this year American Express also decided to use its rewards to push small businesses

“Small businesses create half of the jobs in the private sector and in fact they’ve created 65 percent of the net new jobs over the past 17 years,”American Express CEO Ken Chenault said in an interview the year after its “Shop Small” program started. “So what small businesses is all about is how the individual can help the economy. Because we need to create jobs and if people create independently owned small businesses in their community, they can make a difference.”

Since that 2011 interview, AmEx has put some money where its CEO’s mouth is, this year for small business Saturday AmEx card members received a $25 statement credit when they spend $25 or more at a qualifying small business.

MasterCard & BoA: Buy Some Gifts, Fund Your Education

Bank of America has a few cards up its sleeve this holiday season, all with slightly different rewards. One interesting way to appeal to the saving conscious credit card user is its Upromise World MasterCard credit card from Bank of America, which allows consumers to earn 11 percent cash back for college when doing their holiday shopping online through

That cash-back holiday promotion discount of 11 percent is in addition to cash-back offers of 10 percent or more available online from Upromise retail partners such as Best Buy, Target, Gap, Nordstrom and Apple.

Users will also get a little extra time with this particular offer – as it will Upromise site will be operational until Dec. 31.

PayPal Discounts For Online And Offline Shoppers

Never underestimating the power of a discount, PayPal is making its digital wallet attractive to consumers this season by making it cheaper to buy with PayPal. This year, that effort is married to efforts to help PayPal break out of being an “online” payment method and into the mainstream where people use it to pay wherever they are.

“That kind of multi-channel experience and omni-channel experience for retailers is very well established and growing and so that’s something we’ll probably see more of,” PayPal’s Rob Skinner recently told MPD CEO Karen Webster in an interview.

And it is something PayPal has certainly been pushing this holiday season. Shoppers who used PayPal at Toys‘RUs, Home Depot, Famous Footwear or Aeropostale in-store in early December got $5 off when they spent $25.

Online deals were also available, and will continue for user who copy them into their PayPal account after the holiday season ends.

Chase And Reward Auctions

There are many way card companies allow holders to use their reward points, though JPMorgan Chase found an interesting application this holiday season. Those holding Freedom, Sapphire or Ink cards were able to bid in merchandise auctions in late November, using rewards points to bid on select holiday gifts. Items included a PlayStation 3 or the Samsung Galaxy tablet and bidding began at a single point.

Bidding begins at one point.

Chase also awarded bonus points for shopping online at select retailers through Chase’s Ultimate Rewards program. Chase holders are also being pushed toward gift cards — as they can receive as much as 20 percent off their purchase price on the Ultimate Rewards website through early January.

Google Wallet: Buy A Gift, Get A (Small) Gift

Google Wallet is looking for users and using the simplest inducement possible – paying them to shop. Well almost.

Those who use Google Wallet to buy a gift card for someone else at select retailers’ websites, will receive a $5 gift card for themselves. Retailers included in that promotion are makeup purveyor Sephora, Staples, Whole Foods and movie theater chain Regal Cinemas.

The gift card from via Google is electronic, and comes with one catch – it can’t be used till after Christmas.

Other than the “one-for you, one-for-me” gift card promotion, Google also sought to woo potential wallet users this holiday season with additional deals if they click the “pay with Google” button in certain apps on Android devices.

There’s currently an offer for 5 percent off purchases made in the app for electronics retailer B&H, 20 percent off at men’s clothing retailer app JackThreads and $5 off at online food ordering app Eat24.

Notably not giving a gift to induce users this year? Apple Pay. Apparently using Apple Pay on a new iPhone 6 is a gift enough, and no further inducements were thought necessary.

Except by Chase. The issuer recently offered customers a free download of DJ David Guetta’s new album, if they connected their Chase credit cards to Apple Pay.


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The PYMNTS Next-Gen AP Automation Tracker, is a monthly report that highlights the most recent accounts payable developments and automated solutions that are disrupting how businesses process invoices, track spending and earn rebates on transactions.

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