When it comes to contactless and mobile forms of payment merchants in the United States need a big carrot to lure them to these payment solutions. In other countries, ISOs have attracted merchants by combining a rewards or loyalty program with contactless and mobile payment technology. In Japan, for example, these transactions quadrupled last year, reports JBC, leading credit card issuer and acquirer in Japan. Rewards programs just may be the ticket for boosting contactless payments in the United States.
In fact, Discover Card is creating a substantive contactless infrastructure with rewards programs as the cornerstone. “As an industry, we are changing the basic infrastructure of payments and that’s not been done for 50 years,” says Beth Horowitz, vice president of product management for Discover, which is investing in chip technology and launching a marketing campaign aimed at promoting to merchants the value in contactless and mobile solutions. “For the first time in many years, there is dramatic new technology at the point of sale. Mag stripes have ruled, but now we are introducing a chip that allows you to do things that previously we were dependent on back office systems to facilitate,” says Horowitz.
The biggest change in the contactless arena is that companies like Discover are helping to deliver value more quickly and easily to the consumer. That’s because consumers care more about relevant and timely rewards. If a consumer can acquire rewards at the point of sale, that translates to loyalty—and gets merchants on board.
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