How does Apple Pay associate rewards card with payment?

One of Apple Pay's strongest features is its security. From what I understand, the only time a credit card account number ever gets transmitted is at registration time - in order to create a special "account id" that is stored, encrypted, on the CPU's "secure element". Thereafter, when one pays with a card, only that card's id plus transactional data (e.g. amount of charge) is transmitted through the sales terminal to the credit card company.


If that is the case, how will Apple Pay work with rewards programs? I'm not talking about store-branded credit cards - presumably the store's sales terminal can recognize those by distinguishing features in the account id being passed - but about simple rewards cards: e.g. the Starbucks Card. If I use my American Express to pay for my drink at Starbucks using Apple Pay, how does Starbucks recognize that I'm a Starbucks Card holder and give me credit for my purchase?

(I realize that Starbucks doesn't yet actually accept Apple Pay - feel free to substitute "Walgreen Rewards" or other rewards program)


As an aside: I've made "Discover Card" my default Apple Pay card (they have an awesome 10% back until end of year for using Apple Pay). The Starbucks app now lets you reload your card using Apple Pay. But when I did, it charged another card (the one I have registered with iTunes) rather than the Discover. The next time I reloaded, I paid a bit more attention and explicitly selected "Discover" on Starbucks' Apple Pay payment screen. It returned a message tot he effect that the card I tried to use is not authorized for in-app purchases. This makes it sound like Discover decided not to allow it. Or is it something I must enable somewhere?

iPhone 6, iOS 9.1

Posted on Nov 5, 2015 6:13 AM

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2 replies

Nov 5, 2015 6:30 AM in response to tjwolf

Hi


How rewards cards work with Apple Pay depends on your iPhone settings (including Location Services) and on how a merchant's terminal is set up. For example, with Automatic Selection set up on a pass, a rewards card may be applied to the purchase and payment made using your default Apple Pay card, all by placing your finger on Touch ID and holding your iPhone to the contactless reader. In other cases, the merchant may initially apply the rewards card and then process the payment separately.


More information about Apple Pay and rewards cards (under "Use a rewards card with Apple Pay"):

Set up and use Apple Pay on your iPhone or iPad - Apple Support


More information about passes and Automatic Selection:

Use Wallet on your iPhone or iPod touch - Apple Support


Also, Discover is not yet supported (but will be soon) for Apple Pay payments within apps.

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How does Apple Pay associate rewards card with payment?

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