American Express Co. will now allow US cardholders to use points on Apple Pay, Apple Inc.’s digital wallet and contactless payment service.

The feature gives cardholders greater flexibility to use rewards for everyday purchases, an increasingly appealing option as inflation eats into wage growth. Customers will be able to apply points directly at Apple Pay checkout when making online or in-app transactions, the company said Tuesday.

“Card members want rewards that fit naturally into how they shop and spend,” said Lisa Kalhans, executive vice president of US consumer cards at American Express, in the statement.

With inflation rising and wages no longer keeping up, Americans are looking for ways to stretch their dollars further. Points, which may have traditionally gone to fund splurges like travel and vacations, can now more easily fund grocery store and other mundane purchases.

The announcement comes as American Express seeks new ways for clients to redeem Membership Rewards points. In April, the credit card company added benefits to its Gold card in response to Gen Z and millennial demand for travel-related perks. It also recently partnered with Fanatics to let members convert points into FanCash and already allows them to redeem points at checkout on Amazon.com Inc.

Credit card companies have been battling to attract and retain customers as annual fees rise and new competitors enter the market. JPMorgan Chase & Co. last year raised the annual fee on its popular Sapphire Reserve card to $795, while American Express increased the fee for its Platinum consumer card to $895. At the same time, fintech firms such as Robinhood Markets Inc. have introduced premium credit cards to challenge the industry’s established players.

— By Josyana Joshua (Bloomberg News)