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Apple addressed a glaring hole in Apple Pay on Monday, when Blackhawk Network announced that it will integrate gift cards, e-gifts, loyalty and rewards programs into the mobile payment system.
The partnership between the two companies will enable Apple Pay users to make payments using prepaid and gift cards, and will also allow users to earn rewards and loyalty points from participating merchants, according to a press release from Pleasanton, California-based Blackhawk.
Blackhawk has also worked with Samsung Pay and PayPal to bring gift cards to those mobile wallets via its digital stored-value system.
"Blackhawk is working with our vast partnership network to lead the digital transition of different forms of branded value such as gift cards, e-gift and loyalty," Talbott Roche, CEO and president of Blackhawk Network, said in a press release.
Apple did not respond to a request for comment about the announcement.
Apple and Blackhawk did not release specific details about how merchants can work with the companies to integrate gift cards and loyalty with Apple Pay. Apple, however, has pointed to updates in its PassKit API that will help merchants make such connections in the future.
Teri Llach, chief marketing officer for Blackhawk, told Mobile Payments Today in an interview that consumers will be able to load gifts cards and loyalty information in Apple's Wallet app by taking a picture of the physical card with their iPhone's camera, or by manually entering the card information.
Llach could not provide a timeframe for merchant enablement of the capability on Apple Pay.
Kohl's, however, earlier this year offered the industry a glimpse to how such a partnership might work.
The retailer worked directly with Apple to deliver a one-tap checkout experience with its closed-loop credit card and loyalty program. The loyalty integration of Kohl's and Apple Pay did not involve Blackhawk's system.
Llach said that Apple and Blackhawk will work directly with merchants to add gift card and loyalty programs to Apple Pay.
The announcement comes three weeks after Samsung introduced a Samsung Pay-specific loyalty program called Samsung Rewards.
Samsung's loyalty effort enables Samsung Pay users enrolled in the rewards program to earn points for every Samsung Pay transaction. Eventually, users also will have the opportunity to redeem their stash for retailer gift cards, prepaid Samsung Rewards Visa gift cards, Samsung products and more.
While Apple's loyalty partnership with Blackhawk depends on retailer programs, Apple Pay's enhanced loyalty capabilities come at a time when consumers want more value from their mobile wallets.
"Everyone knew that consumers wanted [gift card and loyalty options] That’s not a big surprise," Llach said. "But [mobile wallet providers] had to bide their time with such features and wait as they addressed the priorities of everything that had to be done with mobile payments."
Llach said that some of these priorities included developing hardware and the point-of-sale interaction between the terminal and smartphone.
Indeed, many industry observers have stated their belief that once mobile wallet providers smoothed out the transaction component of mobile wallets, the likes of Apple and Samsung would turn their attention to value-added services.