(BII) This story was delivered to BI Intelligence "Payments Briefing" subscribers. To learn more and subscribe, please click here. Walgreens, the U.S. pharmacy chain with more than 8,000 stores, will become the first merchant to integrate its loyalty program into Android Pay, the company announced. Users will be able to tap to earn and redeem loyalty points at the checkout ahead of making a payment. This is a significant development because loyalty is the top desired service among mobile wallet users, and Apple Pay already offers this capability. Twenty-two percent of US adults noted that they would like to use their mobile phones to organize, track, and store gift cards, memberships, loyalty, and rewards points as of the end of last year, according to the Federal Reserve. That number spikes when loyalty is directly affiliated with mobile wallets specifically — 67% of UK and US adults want loyalty card integration for their mobile wallets, according to data from Urban Airship. And when it is available, consumers take to it quickly. In Q4 2015, just a few months after Apple Pay enabled store and loyalty card integration, 25% of cards loaded into Apple Pay among US iPhone 6 users were store or loyalty cards. Pharmacy chains are a good place for mobile wallets to begin implementing loyalty. It’s likely that pharmacy chains like Walgreens have strong loyalty programs with an active, engaged user base because consumers tend to visit on a recurring basis to buy goods or fill prescriptions. Walgreens counts 85 million members in its Balance Rewards program, 45 million of whom are likely Android users based on data from comScore. That provides Android Pay with a strong addressable base who might test Android Pay for Balance Rewards and ultimately load in other payment cards and begin using the service in other locations. And in turn, it might give the service, which remains largely underutilized, a needed boost and begin to kickstart adoption. Mobile payments are becoming more popular, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years. Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption. Here are some key takeaways from the report: In full, the report: To get your copy of this invaluable guide, choose one of these options: The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of how mobile payments are rapidly evolving. More From Business Insider
Walgreens has become the first company to integrate its loyalty programme with Android Pay. According to the Federal Reserve, 22% of US adults wanted to use their smartphones to "organise, track, and store gift cards, memberships, loyalty, and rewards points", while 67% of UK and US adults want loyalty card integration for their mobile wallets, according to Urban Airship's data. Walgreens already has 85 million members in its Balance Rewards scheme, more than half of whom are Android users. Mobile payments are set to rise from $503bn this year to $75bn in 2020.