Discover, the last hold-out among the four major credit card issuers, has officially rolled out Apple Pay support for iOS 9 as of yesterday. Discover is certainly making up for lost time with a significant incentive. Similar to other issuers, Discover recognizes the need to encourage usage. Discover cardholders can now earn a 10% Cashback Bonus on all purchases, up to $10,000 of in-store purchases, from now to the end of the year – that’s $1,000! Discover it Miles, Miles, and Escape cardmembers can also earn an extra 10 miles on every in-store dollar spent, up to $10,000. Although the company has yet to email cardmembers with any announcement about the offer or instructions on using Apple Pay, it did respond to a tweet yesterday, confirming “Today is the day! You can now use your Discover card with Apple Pay. Be sure to download iOS9 first.”

Discover may have the right approach when it comes to this latest offering. As with any new technology, adoption requires repeat use to really stick, and such a rich incentive is likely to create a lot of usage among Discover cardmembers over the next few months. According to Mintel’s Consumer Payment Preferences and Behaviors US 2015 report, 69% of US consumers have never used a mobile payment system, but a quarter of those stated they would begin using one if they could get a discount for doing so and 23% would if they could earn rewards.

23% of US consumers who have never used a mobile payment system would do so if they could earn rewards

Apple Pay’s latest list of participating banks now includes over 500 issuers nationwide, with more slated to join before the end of the year. Citizens Bank and E*Trade are among the most recent institutions to announce their support of the contactless payment service. In addition, more than 100 US stores and apps accept Apple Pay, and that list continues to grow. According to Apple CEO Tim Cook, “We’re on track for Apple Pay acceptance at over 1.5 million US locations by the end of 2015.” This growth will be further fueled next month when the Payment Networks’ Liability Shift takes effect in the US, moving the responsibility on to the retailers to upgrade to NFC- and EMV-capable terminals.

Competition is heating up for Apple Pay with the introduction of Samsung Pay and Android Pay. Samsung Pay, expected to launch at the end of this month, has the advantage of working on any standard magnetic stripe terminal, making it immediately more accepted than Apple Pay. However, it will only work on Samsung Galaxy S6-series devices as well as the Galaxy Note 5 at first. Android Pay, which is essentially an upgrade of Google Wallet, will work across any Android device, giving it the upper hand against Apple Pay and Samsung Pay. With Android Pay you don’t need to download an app or enter a pin, it’s built right into the operating system. It will also prompt you to use a loyalty card or gift card if you have one, which takes away a lot of possible friction from the customer experience standpoint.

At a time when consumer wallets are becoming more and more fragmented, contactless payment systems offer a unique opportunity for one card to truly become a customer’s default payment method of choice, without the card ever leaving their wallet. Consumers are always on the hunt for the next low-cost option, but they also want convenience and security, not to mention rewards. The race is on to increase acceptance levels, both from the consumer and the merchant. There might not be an actual finish line or a clear winner, but the next few months will prove to be an exciting match to watch.

Lily Harder is the Vice President of Research for Mintel Comperemedia. Lily specializes in the financial services industry, researching and presenting on the latest industry trends, competitive intelligence insights and newsworthy developments.

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