Author(s): Peter Bryer
We've heard of Apple Pay, Samsung Pay and Android Pay. Now there's Walmart Pay.
Yesterday Walmart announced a mobile payment service called Walmart Pay, making it the first major retailer in the US to offer its own mobile payment service. Walmart Pay does not require NFC or other special hardware. Shoppers use a dedicated app and their phone's camera to scan a code generated at the point of sale. Payment is handled by the credit or debit card that is linked to the app, with the back-end system sending an itemized receipt to the smartphone.
Walmart's mobile payment feature will be introduced in selected Walmart stores beginning this month, with a nationwide launch in the US by the middle of 2016.
The announcement throws into doubt the future of the Merchant Customer Exchange (MCX), a mobile payment consortium Walmart formed in 2012.
Twenty-two million customers use the Walmart app each month and it ranks among the top three retail apps in the Google and Apple software stores. Walmart's app enhances the shopping experience in its stores with features including collection of online orders at Walmart stores, refilling pharmacy prescriptions and finding an item's store location.
The track record for mobile payment services is not good. Apple Pay and Android Pay have yet to become major forces in the financial world, with only a small percentage of iOS and Android users adopting them. We predict that smartwatch ownership and use of Apple Pay will rise hand-in-hand, but there's still a way to go. The problem isn't one of convenience as much as apathy.
Walmart Pay stands a better chance of succeeding: it works on both iOS and Android, and follows in the footsteps of a similar scheme from Starbucks, which which has seen widespread use. According to Starbucks, mobile payments now account for about a fifth of its in-store transactions in the US, having doubled from two years ago. Starbucks CEO Howard Schultz believes "investments in the mobile experience, including a growing loyalty card program and digital payment apps, is what's helping power the company's growth".
Walmart was no doubt inspired by the usability and success of programmes such as Starbucks'. No premium hardware is required. This could work for Walmart.
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