The concept of merchant-sponsored wallets has been around for a long time, beginning with gift cards that could linked through a mobile app and automatically reloaded, and expanded to allow an ever-growing number of funding sources, such as PayPal, Visa Checkout, Masterpass, Chase Pay, Apple Pay, and more, as well as direct entry of payment card information. Particularly appealing are integrated rewards programs, which deliver the holy grail of real-time coupon redemption at the point of sale. The number of merchant-branded wallets is growing rapidly. However, as noted below, many of these wallets have lots of room for improvement.
Over the summer, I signed up for a number of these apps that I hadn’t previously used, because I wanted to see how they actually worked in practice. You might say I’m doing this so you don’t have to. Here are a few observations from the last couple of years:
Lack of support from particular locations
“Participating locations” is a meaningful restriction. I am used to seeing this stipulation on coupons, but never really ran into problems except on a couple of occasions. Now, more than once I have arrived at a gas station and attempted to use the gasoline company’s mobile app, only to be told that payment via the app is not available at that location. This wastes my time. Couldn’t the station operator at least post a sign saying that the location does not support the branded app?
All too often items I ordered are left out or replaced with alternates without notice. Since the whole idea is speed, and everything is stacked in a bag, I often do not discover the error until the delivery person has left, or until I have left the store, requiring me to either accept the error, call the delivery person back, or go back to the store. These errors are difficult to understand, because, in contrast to in-person ordering, everything is precisely specified by computer. The receipt that comes with the delivery includes everything that was left out or gotten wrong. Are store staff being trained to check the order against the receipt before sending it out? Could they send me a text or notification asking me to choose a replacement item? This has to be expensive for the restaurant, which is spending time on rework rather than making money.
Because I am a rewards program fan, I usually have coupons of various sorts loaded onto my account. It seems to me that these should automatically be applied to my order where applicable, but that does not always happen. CVS Pay is the worst of the offenders, although it seems to have improved a bit in recent months. It used to be that CVS Pay would launch the payment screen before the clerk had a chance to apply the coupons, so that the clerk would have to reverse the transaction, scan everything again, and then have me wait until I got the go-ahead from the clerk before I clicked pay. Now that CVS accepts Apple Pay, I see little need for the proprietary CVS wallet and may just go back to using the ExtraCare card. Periodically, McDonald’s attaches stickers for free food to their food containers as part of sweepstakes, but these are not integrated into the app, so I have to present them separately. At other restaurants, sometimes rewards can be used in combination, and sometimes they can’t be; in the latter case, they manage to turn what should be a positive experience into a negative one. Do I really have to break my order into pieces just to get all the rewards I have earned? Obviously, this doesn’t work at all in a delivery context. Finally, a number of merchants participate in multiple, overlapping multi-merchant reward programs, such as GetUpside, forcing the reward-loving consumer to do a lot of mental math to figure out which app to use to maximize their savings. These multi-merchant reward apps, in particular, are best avoided for now. They are simply not worth the effort, especially since they currently have a very limited selection of stores, many of which may not even be in your geographical area.
Account updater services having existed for years now, there is no excuse for merchants not to avail themselves of the option to automatically update the expiration data and security code (CVV) when a card is reissued under the same number (note that we are on the cusp of a mass reissuance cycle now that millions of EMV chip cards are about to expire). It is surprising to me that merchants would rather risk losing sales than pay the fee. Just this past month, I have been bombarded by expiration notices from Dunkin’ Donuts, Starbucks, and others. Worse, the process for updating the expiration date is extremely obscure. Ideally, I should be able to just enter a new date, update the CVV code, and go on my way. Instead, I have to go to the website, log in, and change the information there. Sometimes, it won’t let me update the data at all, requiring that I instead I enter a new payment method, delete the expired card, and re-enter it. It is easier to just use Apple Pay, Visa Checkout or PayPal, which don’t have this problem. It also breaks the automatic reload function, leaving me fiddling with the app while I’m in line – oh no! I’m the modern equivalent of the old lady writing a check!
Tedious enrollment processes
Almost none of these apps has a “guest” enrollment feature. Instead, you have to supply a user ID and generate a “strong” password – at least 8-12 upper and lowercase letters, numbers, and symbols. (Seriously? For gas purchases? Who’s going to steal my phone and then use it to buy gas?) That means submitting yourself to marketing emails and notifications. (Yes, you can turn these off, but it’s yet another step). Then you have to confirm your email address and enter a validation number from a text message. Sometimes, as with Shell, there’s a whole separate rewards program that you also have to sign up for, which has its own app, which requires its own login, etc., etc. More than once, I’ve rolled up to a gas station and ended up using my card, because there are people in line behind me and I don’t have time to get through the enrollment process.
So, perhaps it isn’t surprising that, in Mercator Advisory Group’s 2018 Customer Merchant Experience survey (Report 2), only 5% of respondents said they used a mobile app as their primary method for paying at coffee shops, and only 2% at gas stations and pharmacies. If a payments expert can’t get these things to work properly, what hope do ordinary consumers have? For all the excitement about mobile order and pay, my experience shows there is much room for improvement, almost all of it fixing bugs. When it works, the experience is awesome. Now we need a serious focus on fixing the exceptions.