Samsung Pay phases out its US rewards program in the new year
- Samsung Pay ended its long-standing rewards program for its US users.
- This move will potentially open itself up to increased competition as well as outside growth opportunities.
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The mobile wallet will now only offer rewards for purchases made at Samsung-branded outlets like Samsung.com or the Samsung Galaxy Store, or "by visiting special locations announced by Samsung Pay," per NFCW. This means that outside of Samsung outlets, users will no longer earn rewards points for Samsung Pay transactions or gift card purchases.
The ending of the rewards program—which took effect on January 1, 2021—also means that the tier scheme that lets Samsung Pay users get a higher rate of rewards based on the number of points earned in a given period has concluded.
Samsung Pay's rewards program was a major adoption and usage driver for the mobile wallet. Samsung Pay rewards were initially introduced in November 2016, about a year after the mobile wallet launched in the US. Thanks to the program, the mobile wallet garnered millions of users throughout the US: Samsung Pay saw 25% month-over-month growth between November 2016 and November 2017, and it gained 1 million US users in the first week of November 2017 alone.
Further, in November 2017, Samsung estimated its rewards program increased usage of Samsung Pay by 48%. Rewards were also likely a key incentive driving repeat usage for Samsung Pay, as consumers may have gravitated to the payment method to accumulate rewards.
Cutting its rewards program could be a cost-saving strategy for Samsung Pay—but the move might also usher in increased competition in the US market.
- Samsung Pay reached 14.7 million US users in 2020—which might've been a motivating factor in Samsung's move to cut rewards. Samsung Pay users accounted for nearly 17% of proximity mobile payment users in the US in 2020, according to eMarketer forecasts from Insider Intelligence. Samsung Pay's growth in 2020 was also likely uplifted by the increased usage of contactless payments throughout the coronavirus pandemic. So, ending its rewards program could be a cost-saving move now that Samsung Pay has reached high penetration in the US. Additionally, given that most US consumers are using iOS devices and Samsung operates on Android, Samsung Pay may have felt it reached its ceiling in the US market.
- Meanwhile, competitor Google revamped its Pay app to entice new users—mounting a threat to Samsung Pay. Google Pay added a slew of new features to its platform, helping the mobile wallet top app store charts in December 2020. This likely poses a threat to Samsung Pay since it risks losing some of its users to Google, even more so with the phasing out of its rewards program. However, the capital that might've gone toward maintaining its US rewards program could provide Samsung Pay with other growth opportunities in markets outside of the US. For example, it could look to expand offerings and rewards in India, where mobile payments have been on the rise.
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