Payment methods with loyalty program app - Tomasz Makaruk

Payment methods with loyalty program app

Today’s text is devoted to a comparison of the functional aspects of the payment methods through loyalty program apps equipped with the Pay module. In addition to the apps of the programs listed above, the material also includes the experience of using the Orlen Pay app, Green Caffè Nero (de facto YOYO solution) and the Starbucks Rewards app (formerly My Starbucks Rewards).

These issues are discussed in the following text:

  • Which loyalty program apps in Poland offer mobile payments;
  • Comparison of payment methods using the loyalty program apps;
  • Case study of the Orlen Pay, Green Caffè Nero and Starbucks mobile apps;
  • Analysis of the benefits of mobile payments for participants.

Payment methods with loyalty program app

All of the Pay solutions achieve the same goal – payment of the amount shown on the invoice or fiscal receipt using the loyalty program app and thus the combining of the loyalty program identification and payment process into one. The method of payment itself is different in each of the analysed cases. Comparing five apps with the mobile payment functionality – the analysis of which is the basis for this text – four payment methods can be distinguished. These are:

  1. displaying a virtual program card on the smartphone screen (in the form of a QR code) to be scanned by the cashier using a QR code reader at the cash register. No authorisation for either of these two steps. This is how you pay with the Starbucks Rewards app;
  2. displaying on the smartphone screen the virtual card of the program after prior authorisation of access to the card (in the form of a QR code). The authorisation is biometric or with a PIN (depending on the type of mobile device and its settings). The transaction itself is not also authorised. This is how you pay with the Lidl Pay and Green Caffè Nero apps. The payment consists in reading the code in the reader at the checkout. In both of these cases, the participant (buyer) can choose one of the two options that are presented when the card is scanned. The two options are points accrual, and points accrual and payment. In the Caffè Nero app, we find a Portfel (Wallet) button. After pressing it, we can choose one of the two options “Collect Stamps Only” or indicate the added payment card. Interestingly, the app of the cafe chain communicates with the participant alternately in Polish and English. Messages in two languages function simultaneously;
  3. authorisation (biometric or PIN) of a specific transaction, the data of which is displayed on the smartphone screen after the cashier has scanned the loyalty card in the form of a barcode from the smartphone screen. Displaying the card itself is not subject to any authorisation. This is how you pay with the Żappka Pay app;
  4. authorisation (biometric or PIN based, additionally based on geolocation) of a specific transaction, the data of which is displayed on the smartphone screen after the buyer has scanned the QR code placed in the point of sale. The mere activation of the camera by the app is not subject to any authorisation. This is how you pay with the Orlen Pay app;

In the first of the indicated payment methods, the payment is prepaid – it is actually the use of a part or all of the value of the voucher. In the Starbucks Rewards program, collecting points (stars) is conditioned on the payment being made using a Starbucks Card (plastic or virtual in the mobile app). In the case of the other three methods, the payment is made via the payment card connected to the app or (in the case of Orlen Pay) also via Apple Pay or Blik.

Only in the case of Orlen Pay, the whole procedure is independent of the role of the cashier and takes place at the distributor. The address of the station, station number, amount, number of litres or car wash program is authorised on the smartphone screen. An invoice is also automatically generated, which is then available in the repository (similarly to e-paragons in Lidl Plus). In the other cases, the cashier (in café chain programs – the barista) is an active participant in mobile payment transactions. This “human factor” is often the cause of problems. Cashiers in Żabka must also enable the appropriate functionality on the cash register screen. Due to the fact that only a small percentage of payments is made using Żappka Pay, cashiers notoriously confuse the willingness to pay with Żappa Pay with the accrual of Żapps and the payment with Żapps for the purchased products.

As PKN Orlen’s solutions stand out from the organisers of other loyalty programs, it is worth taking a closer look at this offer.

Orlen Pay

Orlen Pay, which initially seems to be a functionality of the VITAY app, is in fact a separate mobile app. In the VITAY app, there is the Pay with Orlen Pay button, but pressing it opens the Orlen Pay app. In order to use it, you must register “from scratch”. Being an active participant of the VITAY program for many years, I started my adventure with Orlen Pay by providing my first and last name. I didn’t find the “download data from the VITAY program” functional. The registration process consists in providing personal data, the scope of which depends on whether we activate the “Company Account” button.

After making such a choice, the fields for entering the VAT number, company name and address, vehicle registration number and “invoice description” appear. The data is confirmed with a unique SMS code, which must be entered into the app. Orlen Pay supports payment cards (this requires that the card data be connected to the app), Apple Pay and Blik. Such a wide range of possibilities distinguishes this app from the available market offers. After adding a card, the system suggests the possibility of adding loyalty and discount cards, including VITAY, Biznes Tank and Big Family Cards. Adding a payment card is confirmed by a micropayment, which must be accepted by an SMS code.

Sposoby płatności aplikacją programu lojalnościowego - Tomasz Makaruk

It is a little awkward to ask for a number or to scan a VITAY card using your smartphone camera. Since PKN Orlen launched the VITAY mobile app, I have only been using its electronic form. It is surprising that the Pay app is not able to download the data from the database used by the VITAY app.

The payment process itself is very intuitive. We refuel, scan the code from the sticker on the dispenser using the Orlen Pay app, then approve the transaction in the app. Confirmation of payment by SMS and e-mail with an invoice are sent immediately after pressing “Pay”. You can then drive away. I must admit that the first time, I kept looking in the mirror every now and then for a kilometre to check if anybody was chasing me…

Sposoby płatności aplikacją programu lojalnościowego - Tomasz Makaruk

Orlen Pay is the only app on the market that uses geolocation of a mobile device. The terms and conditions provide that the refusal to give consent to locate the mobile device may prevent the provision of services.

Mobile payments at coffee shops

The app containing the electronic form of a Starbucks Card is in practice an electronic purse. First, you need to top up your account, which can be done with a payment card – the app is integrated with the PayU module or bank transfer. Other loyalty program apps that offer the Pay module have payment cards connected and withdraw funds “on the go”.

It is interesting that in the regulations of the Starbucks Rewards loyalty program, the organiser applied the concept whereby the Starbucks Card is issued as an “electronic form of a bearer voucher”, and the service provided by the issuer of the voucher, Amrest Coffee Sp. z o.o., consists in enabling transactions with the use of a card. The organiser reserves that it is not electronic money or a payment card. The card is valid (in fact the funds from the top-up are active) within 12 months from the last card transaction. The maximum amount of the balance is PLN 1,000.

The Green Caffè Nero App is a solution offered by YOYO. Using it gives the impression that it is still a beta version – there are uncovered texts from its development process in the app, communication is carried out alternately in Polish and English. From the point of view of functionality, the mobile payment module of this cafe chain belongs to the same category as the Lidl Pay solution.

Sposoby płatności aplikacją programu lojalnościowego - Tomasz Makaruk

Benefits for the participant from mobile payment

Which solution is the most consumer-friendly? At i360, we think that the this is the ones by Lidl Pay and Green Caffè Nero. One authorisation to display the card is enough. An even simpler solution is offered by Starbucks – no authorisation whatsoever – but its prepaid nature is a big barrier for it to become functional. Are these the safest solutions? Certainly not.

The highest level of security is presented by Żappka Pay and Orlen Pay, as they require the acceptance of a specific transaction displayed on the screen. In the case of Orlen Pay, the transactions are also supported by geolocation control. The benefit for the participant is the simplification of the payment process by linking it to the identification in the program. The Pay modules of mobile apps eliminate the need to take a physical payment card out of your wallet and authorise it during the payment process. The benefit is clear, it simplifies the transaction and saves time. However, it requires trust as the payment card is connected to an external app.

Definitely, the trend of mobile payments is in line with the trend of combining payments and identification in a loyalty program, which has been announced for many years on the i360 blog, resulting in the accrual of points or other vouchers. The organisers of other loyalty programs will certainly follow this path, and we will follow it carefully.

Post scriptum of 06/11/2021.

In the above text, I presented a short study on the various payment methods available in these apps. Less than a year later, we are checking whether there have been any innovative changes or a total failure on the mobile payments market?

Unfortunately, the payment methods in the apps described in the above-mentioned text have not changed in any way. Why unfortunately? We’ll come back to that in a moment…

As a consolation, I can present you several new mobile payment solutions offered by competing companies.

Rossman Go

An innovative solution is Rossman Go available from December 2020 – i.e. payment for in-app purchases, without the necessity to go to the checkout.

When shopping at a drugstore, we scan the barcodes using the app and put them in our bag. After completing the purchase, we have two options of how we want to make the payment – we can make it on our phone or go to the checkout, where we have to scan the collective QR code of our purchases in order to complete the transaction.

Before proceeding with the payment, we must complete the data in the app. Then, in order to make purchases, you need to run the barcode scanner and scan the products we selected. Once we scan the products, they are displayed in the app, which allows us to easily verify and manage our purchases. In order to complete the transaction, we must select a given payment method – payment card, BLIK, Apple Pay, online payment (PayU, Przelewy24) or payment at the checkout.

Rossman Go is probably one of the few mobile apps that offers us so many payment methods to choose from. It is also a new and fresh way to make contactless payments in stores.

Lotos Pay&Go

The Lotos Pay&Go station app is a novelty on the mobile payments market.

Lotos has offered us the option of contactless payment for fuel since December 2020. You must first download the above-mentioned app to your phone and register. In order to make a payment, scan the QR code on the distributor and the payment is made only via BLIK. Using the app is free.

This type of payment can be used by both individual customers and business people (the invoice is sent to us by e-mail).

What exactly does the whole process look like?

  1. After refuelling, start the app. Then log in to it and start the payment module.
  2. Then the screen initiating the transaction process will be displayed, through which you can scan the QR code on the dispenser. After scanning the QR code, the app will display a form presenting the information concerning your refuelling. If the payment conditions under the transaction are not met, an appropriate message will be displayed in the app informing about the refusal to make the transaction and directing the user to the checkout at the filling station.
  3. In order to complete the payment, you should approve the presented data regarding the details of the transaction.
  4. After the required confirmation of the data, you will be redirected to the payment operator’s website in order to make a payment using the BLIK service.
  5. After LOTOS PALIWA receives the confirmation of the transaction, it will be recorded in the station system as correctly completed.
  6. A correctly completed transaction is documented by a message displayed in the app and an electronic VAT invoice being issued by the seller and sent to the user’s e-mail address.
  7. If the payment is not successful for any reason, the user should go to the cash register at the given filling station and pay for the purchased product directly at the cash register.

Circle K

From April 2021, the Circle K filling station also offers us contactless payment with their proprietary app. We can choose between two payment methods – by debit or credit cards. Provide the card number, card expiry date and CVC/CCV code. Using the app, we can make payments both for fuel and for the services at the car wash.

What exactly does the process look like?

When we want to pay for fuel, we should:

  1. Drive to the selected pump, to which a given number is assigned.
  2. Confirm the pump number in the app.
  3. Choose a card with which the payment will be made.
  4. Within a maximum of 2 minutes from pre-authorisation, pick up the nozzle, place it in the fuel tank, release the lockout within a maximum of 90 seconds from picking up the nozzle, and refuel your vehicle.
  5. As part of the payment, Circle K, after obtaining the pre-authorisation of the transaction, will temporarily block funds on the payment card assigned to the app in order to secure the funds necessary to make the payment in the amount displayed in the app before pre-authorising the transaction.
  6. The payment card will be charged the actual amount of the transaction on the same day the bought products are delivered. Any amounts reserved and in excess of the actual payment amount will be released on completion of the transaction.

When we want to make a payment for the service at the car wash, we should:

  1. Choose a card with which the payment will be made.
  2. Indicate the car wash program in accordance with the options shown in the app and drive to the car wash entrance at the selected Cricle K station.
  3. Select one of the available options “stay outside” or “stay inside” in the app.
  4. Drive the vehicle into the car wash building and start washing the vehicle within a maximum of 1 hour from the time of pre-authorisation in accordance with the previously selected “stay outside” or “stay inside” option and in accordance with the instructions displayed in the app and the procedures applicable when performing this type of activity.
  5. As part of the payment, Circle K, after obtaining the pre-authorisation of the transaction, will temporarily block funds on the payment card assigned to the app in order to secure the funds necessary to make the payment in the amount corresponding to the price of the most expensive car wash service offered by Circle K.
  6. The payment card will be charged the actual amount of the transaction on the same day the bought products are delivered. Any amounts reserved and in excess of the actual payment amount will be released on completion of the transaction.

The invoice for the payment will be sent to the e-mail address provided by the buyer in the app.

Summary and Conclusions

As we can see, more and more companies are meeting our expectations and enabling us to make mobile payments. However, it should be noted that companies so far have not introduced new payment methods to their offers.

Rossman drugstores are the only ones that enable us to make mobile payments using as many as four different solutions (payment card, Apple Pay, BLIK, online payments). In this respect, the organisers of other loyalty programs are lagging behind. It is obvious that each of us has different payment preferences – one will be more likely to pay with a card, while another will choose a fast method of paying with Apple Pay. Chains should take this into account and develop their mobile payments so that they are as easy and pleasant as possible for us, the consumers 😉.

Comparing payments at filling stations, we can see that the Cricle K chain was the only one that offered us the possibility of mobile payments for car wash services, which, unfortunately, we will not see at their competitors’ stations. However, not everything is perfect and when it comes to invoicing, the role is reversed. Competitive stations – the Orlen and Lotos brands allow us to issue an invoice, unfortunately, Circle K is behind in this case, because in order to receive the invoice, we have to go to the cash desk at the station, which misses the point of a contactless payment.

As we can see, more and more brands are offering us mobile payments. In the twenty-first century, where almost all of us do not part with their smartphones, it is a great help. However, none of the companies should rest on their laurels, but should invest in newer and newer payment solutions. However, it will probably be a long time before we are presented with a perfect mobile payment app.

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