The news: Early Warning Service’s Paze’s promotional campaign is driving activity for wallet as new users juice the welcome promotions for their benefit, per Bloomberg. 

• On average, 97% more Paze wallets were set up from June 15 to July 13 than in the prior four weeks, per Richard Pesce, a spokesman for Early Warning Services.
• Participating retailers such as Wendy’s, Domino’s, and Dunkin’ reported “strong transaction history,” per Pesce.

Savvy cardholders are using the promo to print “free money,” per Bloomberg—buying multiple $10 gift cards to, say, Dunkin’ Donuts in separate transactions to get the $10 cash back as many times as possible.  

How we got here: Paze’s cash-back promotion runs through September 10. Users can earn $10 back up to 10 times per card at participating merchants—like Dunkin’. 

EWS has also tried to build out brand awareness of Paze with a star-studded campaign “Paze. It Checks Out.” featuring Elizabeth Banks and Gabrielle Union, playing on EWS’ status as a coalition made up of banks and credit unions.

Why this matters: Paze has struggled to replicate the success of its sister brand, Zelle. The digital wallet is constrained by the limited number of its participating merchants—33, per its merchant directory. 

The recent “Paze craze,” however, shows that genuine engagement can be won through promotions—while other volume gains can better be characterized by card churners aggressively stacking spending on $10 gift cards to unlock “free” money. 

The repetition of earning $10 back up to 10 times could help lock in new payment behavior once the promotion wraps. It takes 66 days, on average, to develop a habit, per researchers, and Paze’s promotion runs 30 days longer than that—priming consumers for new payment reflexes, if they have enough applicable cards to use the promo for that long.

A note of caution: One Paze user told Bloomberg that he found the “Paze checkout system a bit clunky, with more friction to complete an order than Apple Pay.” After the promotional period wears off, it's likely some users will defect to more frictionless ways to pay unless Paze streamlines its design.

Recommendation for digital wallets: Consumers will optimize their behaviors around promotional rewards while they last. However, for payment behaviors to stick, the digital wallet has to be more usable.

• Expanding merchant acceptance can make it easier for users to choose the mobile wallet at checkout.
• And adding helpful features beyond payments can keep users coming back, like travel ticketing, receipt splitting, and passes.   

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.