PayPal for iOS now lets you carry virtual versions of your loyalty cards
PayPal has just updated its flagship iOS app with a major new feature and a couple of welcome improvements. — In September last year, just ahead of the launch of iOS 7, PayPal for iOS was updated with a new design …
Context & Ripple Effects
PayPal’s iPhone app began as a way to move money between phones, including its 2010 phone-tapping transfer partnership. By 2014, PayPal had added fingerprint- and wearable-oriented payment apps and expanded its in-app Pay at Table and Order Ahead services to the UK and Australia, making the iOS app a broader point of contact for payments.
Adding loyalty credentials extends that app from a transaction tool into a place users can keep the identifiers that influence where and how they shop. The wide same-day pickup across Apple- and payments-focused outlets signals that the feature sat at the intersection of mobile wallets and merchant loyalty programs.
First-order effects
- PayPal iOS users can keep virtual loyalty cards alongside a payment app, reducing the need to carry separate physical cards.
- PayPal gains another recurring reason for users to open its app outside of sending money or completing a payment.
Second-order effects
- Merchants running loyalty programs face a new distribution choice: seek visibility inside PayPal’s wallet or rely on their own cards and apps to stay in customers’ routines.
- PayPal’s Pay at Table and Order Ahead offerings become more strategically aligned with loyalty, since both aim to connect the app to a merchant visit rather than only to a payment transfer.
Third-order effects
- If payment apps increasingly hold loyalty credentials as well as payment functions, wallet providers can become a permission layer between merchants and customer relationships.
- The competitive boundary shifts from who processes a transaction to who controls the mobile interface where payment, identity and rewards are selected.
The trend: Mobile payment apps are broadening into wallets that aggregate the credentials merchants use to retain customers, not merely the means to pay.