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The major US issuer will offer its customers a $5 statement credit if they use Apple Pay or another digital wallet to withdraw cash from an ATM, according to PYMNTS. The deal, which is available once per customer, is only for first-time digital wallet ATM users and can't be applied to business debit cards. It also appears to only be available for iPhone users, per 9to5Mac.
The move comes as proximity mobile wallet adoption swells in the US. With nearly one-third of US smartphone owners (29%) already making mobile proximity payments, volume is expected to grow from $98.9 billion last year to $220 billion in 2023, according to eMarketer - figures that represent a faster annual growth rate than both mobile commerce and mobile peer-to-peer (P2P) payments.
Volume will be driven by increased acceptance at top retailers, familiarity with contactless payments, and transit enablement - factors that will help bring the 20% of nonadopters who are interested in doing so into the fold.
For issuers, offering incentives represents a way to capture some of that volume as they battle for primary card status.
- Consumers' card selection process differs between mobile wallets and physical cards, creating new obstacles for issuers looking to attract spend. The average consumer holds multiple credit and debit cards, leading issuers to fight for volume. In the past, the battle for primary card status used to occur with each purchase, but mobile wallets, which only ask customers to select a default payment option once, require a different tactic, per CNBC. For issuers, this is risky: If consumers don't enable their card as the payment option of choice upon wallet setup, or have a reason to switch their default option, they'll lose out on volume as consumers shift payments from cash and physical card to mobile in the years ahead.
- Leveraging ATMs represents a path for issuers to use incentives, which have been proven effective, to capture debit spending. Issuers have long-relied on rewards for determining primary card status in credit cards: They represent the deciding factor for 79% of users, per TSYS. However, debit cards are harder to tap into, since they rarely come with traditional rewards offerings - but they're equally important, as 54% of US users consider them their preferred payment method and they comprised 28% of transactions in 2018. Leveraging ATMs to convince consumers to default to a specific debit card in the wallet could be an effective tactic for issuers to begin capturing that spend.
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