The only viable long-term way to get shoppers to change their preferred payments method is to give them a reason to do so. Whether that’s a discount for using NFC rather than plastic or greenbacks, coupons/discounts that are only available using a specific payment method or some other perk, consumers need to get something concrete. This is the bulk of the message that MCX is screaming.
With its U.K. rollout, MasterCard announced free Apple Pay travel days until the end of the year, but only on Mondays. Technically, the fares aren’t free but riders will have those fares reimbursed. “Customers can travel on Tube, buses, tram, DLR, London Overground and most National Rail services in London,” said a MasterCard statement. “From a standing start to today, over 220 million journeys have been made using contactless bank cards and devices with over one million contactless journeys made every day. Currently, contactless journeys made across all modes make up nearly 25 percent of pay as you go journeys.”
More to the point, though, those contactless payments have generated non-travel contactless payments. “The move by TfL (Transport For London) last year to accept contactless cards and devices on London Underground has been a phenomenal catalyst to the growth in contactless payments across the U.K.,” said Mark Barnett, president of MasterCard UK & Ireland.
There isn’t a better vertical for mobile payments than mass transit, nor is there a segment that is better positioned for payment facilitators. The need for speed and the large number of players involved with subways, independently-owned taxis, ferries, trains and buses, let alone PF-friendly mobile car services including Uber and Lyft—dominant in the U.S.—Didi Kuaidi in China, Ola in India and Singapore’s GrabTaxi.
As Barnett pointed out, the reason PFs consider transport so moving (my apologies) is that it is helping to boost mobile payment acceptance in dozens of non-related areas, as it helps consumers change their payment behavior. What better place to see the value of contactless than when they trying to catch a rushhour subway?
Hence, Apple is hitting the payments trifecta with this move: incenting Apple Pay over payments options (including other mobile payments options) with hard cashbacks; pushing the incentive in an area perfectly suited to show off mobile payments advantages; and helping to materially move the needle in other verticals.