Is Mobile Loyalty Coming of Age?

Oct 29, 2016

Innovative mobile phone loyalty apps are fast developing in the wake of a surge in mobile payments. The developers of many of these apps claim to provide us with the ability to store all our loyalty cards in one convenient place, track our loyalty currency and notify us of local or specific store deals or relevant offers/promotions, all through the convenience of our mobile phone.

The last 24 months has seen a revolution in the way we use our mobile phones. With many users now dependant on their use for daily needs such as Facebook, Banking, News, Entertainment and of course calls and texts, the mobile phone has become the most important communications channel for any large B2C organisation.

This past year in particular, we have seen a sharp rise in the emergence of apps marrying both payments and loyalty together. For some time we have been used to the idea of paying for convenience goods and services through our phones such as parking, coffee, music, apps and peer to peer money transfers by using a stored payment card or pre-paid wallet. This is an inevitable stepping stone toward our phones and apps essentially becoming an extension of our everyday purchasing behaviour.

The emergence of apps such as Apple Pay, Google Wallet, PayQwiq, Bink and Samsung Pay, provide the basis for a more viable loyalty app. PayQwiq which is a payment app that allows customers to store their payment cards to pay for groceries at Tesco tills; also allows customers to track how many ClubCard points they have earned per transaction as well as providing transaction history and an up to date points balance.

Bink takes a different approach, unlike PayQwiq which is so far limited to payments at Tesco stores and use of the physical phone for payment, Bink provides a wider range of stores where their app is accepted and the customer continues with the use of plastic payment cards, (although it would be simple to extend the app for payment). Registering all payment cards and all loyalty cards with the Bink app allows the consumer freedom from positive engagement – not normally a good idea when you are trying to get the customer to feel rewarded at the time of purchase.

These two approaches have their strengths and their weaknesses, neither is perfect. PayQwiq leaves the consumer fumbling to load the App and the correct page within the App to perform a transaction, the loyalty content is underwhelming and ultimately not inviting or engaging. Whereas the Bink App is more exciting and engaging, but will the consumer remember to open it to look at and use the content? More importantly, will the consumer trust the app with their payment card data when in the small print; the consumer is taking all the risk.

In conclusion; in our opinion whilst we have witnessed some progress, there is more to be done before we see the emergence of a winning mobile loyalty app.