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Apple Pay is one step closer to fully replacing your wallet.
The mobile payment system is adding compatibility for retail store-branded payment cards as well as retail loyalty programs, Apple Pay chief Jennifer Bailey announced at the company’s developers conference on Monday. The additions are a must if Apple wants to broaden its appeal to shoppers and retailers alike.
The company said private-label cards from BJ’s, Kohl’s and J.C. Penney would now be available in Apple Pay, as well as loyalty cards from Dunkin’ Donuts and Walgreens. It’s not clear how many other retailers are adding store or loyalty cards to the Apple Pay system. They’ll all be stored in a new app called Wallet, which replaces the outgoing Passbook app.
The introduction of the store-branded cards should be an important one for Apple since the store cards are attractive to both shoppers and retailers — something that’s not always common in the payments industry. Shoppers are attracted to the cards because they often come with perks, like 5 percent back on every purchase and free shipping in the case of Target’s Redcard. Retailers like them because they’re typically cheaper to process for the stores than mainstream credit and debit cards.
The compatibility with these private-label cards will also eliminate one planned difference between Apple Pay and CurrentC, a competitive app being developed by a consortium of retailers called MCX that hasn’t yet publicly launched. The inclusion of Kohl’s means Apple Pay has lured another MCX merchant to its competitive system, following an announcement from Best Buy earlier this year.
Bailey also said that popular American grocer Trader Joe’s will soon start accepting Apple Pay and added that more than a million locations will be Apple Pay-compatible by next month. (Note: This is not an Apple Pay phenomenon. A lot of modern payment terminals are compatible with NFC, the technology through which Apple Pay transactions are transmitted in stores, out of the box.)
To help seed merchant adoption, Apple will also start selling a new Apple Pay-compatible payment device from Square, the payment processing company that works with small and mid-sized businesses. Square CEO Jack Dorsey has been saying since last year that his company would eventually unveil a payment terminal compatible with Apple Pay.
On the international front, Apple Pay is launching in the U.K. next month and will be available as a payment method for London’s public transportation system.
Apple Pay allows people with newer iPhones or the Apple Watch to pay for items in stores by tapping their phone or watch instead of swiping a physical card or handing over cash. The payment system launched in the fall with in-store partners such as Whole Foods and McDonald’s but still faces challenges. One big hurdle is convincing shoppers that there is a big advantage to paying with their phone or watch, when swiping a card is in many cases just as easy.
This article originally appeared on Recode.net.
