One of the more interesting discussions during the Digital Money Forum Wednesday at last week's Consumer Electronics Show in Las Vegas was whether the payments industry has come to a tipping point with consumer adoption of mobile payments in the U.S.
Nana Murugesan, vice president and general manager of services and new business at Samsung, wasn't quite ready to make that declaration; in recent years, many have made that bold prediction — all wrongly, as it turned out.
"It depends on the tipping point definition," he said in one of many panel discussions during the forum. "If your definition is softer where mobile is a more preferred method [with consumers], I think we're getting close — maybe three years away."
Murugesan's view is shared by many executives in an industry that once believed this imaginary tipping point would be in the rearview mirror by now. But year after year, the industry has had to push that goal back. "Let's look at the year 2020," is a rallying cry of sorts for executives.
Meantime, executives will keep waiting ... and asking the same questions about adoption ... and responding with mostly the same answers. But the industry is seeing progress with each passing year.
One popular talking point at tech conferences and forums has been the link between rewards and mobile payments. In 2016, Mobile Payments Today published at least a half dozen viewpoints on the topic.
It's a question we'll keep asking until the tipping point is reached: Do rewards increase mobile payments adoption by consumers?
Starbucks is the go-to example for just about anyone who thinks the answer is yes, but the company had its successful rewards system in place before launching its mobile app in 2009. Still, the app undeniably makes it easier for consumers to enroll in the program, pay for orders and track rewards.
As for third-party mobile wallets, Samsung is claiming early success with a new rewards system tied to Samsung Pay.
Murugesan said that the number of Samsung Pay transactions daily has nearly doubled since Samsung Rewards debuted in mid-November.
The program works much like a typical credit card scheme, awarding points for purchases. Samsung Rewards points can be redeemed for products (from Samsung, of course) such as the Gear Fit2, the Fast Charge Battery Pack and Gear VR headset.
While Samsung has not revealed specific transaction numbers, Murugesan's remark lends credence to the argument that rewards do help increase consumer adoption of third-party mobile wallets.
"Innovations like Samsung Rewards are giving consumers a real incentive to embrace Samsung Pay," he said. "We are seeing that people are more likely than ever before to try mobile payments."
Later that day, Samsung announced that the number of Samsung Pay "power users" — those who make mobile purchases almost daily — has more than doubled each week. The number of monthly users has surged as well, according to the company.
Judging by news releases over the past four weeks, Apple might be making similar claims about Apple Pay in the near future.
Last month, Blackhawk Network announced that it will integrate gift cards, e-gifts, and loyalty and rewards programs into the mobile payment system. The partnership means that Apple Pay users will be able to make payments using prepaid and gift cards, and also will allow them to earn rewards and loyalty points from participating merchants.
USA Technologies, a provider of payment technologies for cashless and mobile transactions in self-serve retail, announced Wednesday at CES that it plans to integrate its More loyalty and payroll deduction platform with Apple Pay for use at up to 300,000 vending machines in the U.S.
"When the consumer experience is good with the payment and you add loyalty, you change the experience and you enable behavioral change," Michael Lawlor, chief services officer for USA Technologies, said during Wednesday's forum.
And that's exactly what the industry seeks at the moment — behavioral change by consumers. Rewards might be one way to reach that tipping point in something less than three years.
/ Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.