The news: American Express members can now pay with points, cash back, or miles through Apple Pay, per a press release.

Eligible card members can select Use Membership Rewards points within their Apple Pay checkout experience to complete ecommerce purchases.

Why this matters: Redeeming points through Apple Pay increases flexibility of how cardholders can use rewards. 

The ubiquity of Apple Pay across online checkout greatly increases Amex users’ ability to shop at the store of their choice with points. This move also expands Amex’s rewards apparatus to both high- and low-end purchases:  travel bookings on the one hand and essential categories wherever Apple Pay is accepted on the other.

Zooming out: Consumers are pulling back on spending as the cost of essentials like gas and groceries rise: More than two-thirds of US adults are cutting back on discretionary spending, per an EY-Parthenon US Consumer Sentiment survey. 

Implications for issuers: Allowing consumers to pay by points could help encourage more “guilt-free” discretionary purchases or bigger carts for essential hauls. Issuers can further drive spending by highlighting FMN offers close to where cash back, points, and miles are posted in the apps, driving consumers to feel like they’re layering deals for best value. 

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