Mobile wallet lovers, the ranks of which grow daily, are still buzzing with the late 2020 announcement that purchases made with the Samsung Pay mobile wallet in 2021 will not earn rewards points redeemable with the popular Samsung Rewards program.
It’s starting a wider discussion about the future of mobile wallet rewards programs.
As PC Mag reported in the final weeks of 2020, “Samsung Rewards members have received emails outlining changes to the program. They affect transactions made via Samsung Pay as well as gift card purchases,” giving the contents of that email as follows: “As of 12/31/2020 at 11:59 PM PST, you will no longer earn Rewards points for Samsung Pay transactions and gift card purchases. This also means that Samsung Rewards Tiers no longer hold any benefits and we will be ending our Tier program for the time being.”
The company noted, however, that “points can still be earned at Galaxy Store, Samsung.com, Shop app and with other Samsung services and applications.”
Rewards were originally introduced to incentivize consumers to use Samsung Pay, as with some other mobile wallets. Though they languished for years, COVID-19 fears and the rapid evolution of touchless payments — especially in physical stores — saw mobile wallets start to shine.
As 2021 gets underway, if and how Samsung’s move is followed (or not) by competitors will provide a telling look at the direction of mobile wallet adoption strategies of players big and small.
Mobile Wallet Rewards Roundup
In Samsung’s case, Android news site SamMobile reported that “Samsung’s choice of words suggests that this might be a temporary change. We will be ending our Tier program for the time being, claims Samsung, but only time will tell if the program will ever make a return in one form or another.”
Turning to others, last year the Apple Pay mobile wallet celebrated six years of not being used too often — the very problem that mobile wallet rewards were meant to solve.
In Apple Pay at 6: How Consumers Are Using the Mobile Wallet to Make Purchases at the Physical POS, PYMNTS researchers found that while under 3 percent of consumers shopping at stores accepting Apple Pay actually use it, and that total sales settled with Apple Pay in-store hovered at around 1.5 percent, the report added that “demand for touch-free shopping experiences has been fueling an increased use of Apple Pay in recent months. Our research shows that use of Apple Pay at brick-and-mortar stores is up by 59 percent from March.”
Apple Pay itself has yet to try the rewards route. As loyalty rewards news site The Points Guy reported, “Apple Pay itself does not deliver any rewards to users. However, you can load loyalty rewards cards from your favorite stores into the program, making it easier to earn extra rewards without fumbling for a key fob, hunting in your wallet or providing your phone number or email address at the payment terminal. Of course, when you use Apple Pay linked to a rewards credit card, you’ll earn whatever rewards you are entitled to for using that credit card.”
The Google Pay mobile wallet, meanwhile, is keeping its rewards program in place, including a referral reward for bringing in new Google Pay users.
Miles To Go For Mobile Wallets
It’s unclear why Samsung Pay chose 2021 to stop rewarding use at the POS. Introduced in 2016, the Samsung Rewards program itself is considered a success and, more to the point, the company said in 2017: “We estimate that Rewards increased the use of Samsung Pay by 48 percent.”
That symbiosis may have dwindled somewhat after the initial newness of the program, but the pandemic has caused the entire society to revisit mobile wallets, first for their touchless form factor.
Where things go from here remains uncertain. While there was a surge of mobile wallet usage during the worst of the 2020 pandemic lockdowns, the category is seen as underperforming.
As PYMNTS reported in Mobile Wallet Adoption 2020: Mobile Wallet Use and the COVID-19 Pandemic, “Apple Pay’s usage rate declined modestly from 2019 and to an even greater extent from late 2017, when it peaked at 6.9 percent. Usage of Walmart Pay declined to an even greater degree since 2019, from 4.5 percent to 3.3 percent in our latest survey.
“These trendlines are all the more remarkable considering the technical progress that has been made since the early days of mobile wallets,” the report continues. “Apple Pay now works on 93 percent of all iPhones in the United States, up from just 39 percent in 2015, and it can be accepted at contactless terminals by merchants that collectively generate nearly two-thirds of all retail sales. If Apple Pay and Walmart Pay were used to pay for all the purchases where possible in 2019, the annual sales volume would have totaled close to $3 trillion.”
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