Discover’s latest move to offer Apple Pay starting Sept. 16 might mark a late entry to the mobile payments party, but it sure is making some drums roll.
As the latest entrant to offer Apple Pay, Discover is pushing the pedal to boost usage among its more than 49 million-wide user base with a 10 percent cashback offering valid until the end of this year for up to $10,000 of in-store purchases, the company said in a statement. As an added bonus to its customers with a Discover it Miles, Miles or Escape credit card, the company will also be offering an extra 10 airline miles per dollar until they hit the bonus cashback spending limit.
“We are excited for Discover cardmembers to have the ability to use Apple Pay. Rewards have always been important to our cardmembers, and we want to make sure they receive a generous offer for shopping with Discover and Apple Pay,” said Heather Roche, vice president of rewards at Discover.
The added incentives to boost Apple Pay adoption comes as part of Discover’s effort to further expand its user base. Earlier this year, Discover rolled out a new scheme to offer endless double cashback to new customers at the end of their first year since joining.
While only time can tell what offering a generous 10 percent cashback to its users would mean for Discover, the company is sure feeling the strain of going the extra mile to lure new customers.
Earlier this year, PYMNTS reported a rise in Discover’s payments volume and loan portfolio, which grew by 6.4 percent. Its net income fell by a third in the last three months of 2014. The culprit? Discover’s rewards program.
Other than the $178 million in losses incurred from changes to its rewards program, the company took a $21 million markdown for Diners Club Italy, which it reportedly intends to sell, and another $27 million spent on its home loans business that’s off of its revenue-making track.
On the other hand, with Discover’s move to provide contactless payments, Apple now has a much wider market, with all major credit card companies and over 450 U.S. banks supporting it.
However, despite Apple’s continuous efforts to gain traction in the mobile payments market, it still might prove to be a long and tough journey to success for Apple. In a recent survey powered by InfoScout and PYMNTS, a whopping 84.9 percent of iPhone users reported never having tried the service.
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