Credit: Shutterstock photoTo provide an easy, fast and secure payment gateway to its customers at its stores, Wal-Mart (WMT) has launched a new product called Walmart Pay. It will be the first mobile payment system to be used in Wal-Mart stores by customers through their smartphones.
The announcement comes at a time when there is a flurry of launches linked to mobile payment systems and joint ventures in the U.S. by retailers and technology companies. In fact, Walmart is already a part of the MCX consortium – Merchant Customer Exchange – a venture that includes Target (TGT) and Best Buy (BBY) and many others along with Wal-Mart, which has developed an app called CurrentC, which is a single payment system that allows integration of payment accounts and loyalty rewards across a network of merchants.
CurrentC is currently in beta rollout in Columbus, Ohio. According to a MCX statement to E-commerce Times, "Walmart continues to be a strong and supportive partner of MCX and CurrentC - and our goals remain the same - to offer customers choices and convenience at checkout.”
With the launch of Walmart Pay, Walmart becomes the only retailer to offer its own customized payment solution to buyers. It works on any device, be it iOS or Android. Further, it can be linked to any major credit, debit, pre-paid or Walmart gift card, thereby offering customers a variety of options to pick from, all through the Walmart mobile app.
That app has 22 million active users each month and is ranked among the top three apps in the retail category in both Apple and Google app stores. The mobile feature will be introduced during the month of December in select stores and its nationwide launch is expected to be completed by the first half of 2016.
As quoted in the press release, “The Walmart app was built to make shopping faster and easier,” said Neil Ashe, President and CEO of Walmart Global eCommerce. “Walmart Pay is the latest example – and a powerful addition – of how we are transforming the shopping experience by seamlessly connecting online, mobile and stores for the 140 million customers who shop with us weekly.”
The checkout using Walmart Pay will be a simple three-step process: Open, Scan, and Done. The customers have to choose the payment option from Walmart’s mobile app at a checkout counter, activate their phone camera and scan the code displayed at the register after which an e-receipt will be sent to the app.
Scope Of Mobile Payments
With an existing base of 22 million customers who use the Walmart app and a strong market share in the retail space in the US, the launch of Walmart Pay can potentially dent the plans of Apple Pay and the like. Rather, it’s not about Walmart Pay vs. Apple Pay and others; it’s also about the individual success of any of these in the current scenario.
The data below from InfoScout shows the usage of payment mode on Black Friday. According to InfoScout, “We found Apple Pay usage was at its lowest rate since we have started tracking it, being used for only 2.7% of Apple Pay-eligible transactions. On the Android side of the table, we saw an even lower rate of mobile wallet usage – just 2.0% of eligible transactions.”
While the chart and these figures reflect that brands such as Apple Pay or Google Pay have not established themselves strong enough for Walmart Pay to thrive, it also shows the ‘low enthusiasm’ among people to use this technology. According to an Accenture report dated October 20, 2015, despite the increasing awareness about the potential use of mobile for making payments, only about 18% people in North America use their mobile phones to make at least one payment a week. Further, “while the number of North American consumers who know they can use their phones as a payment device jumped nearly 10 percentage points since last year, to 52%, actual mobile-payment usage remained flat, growing only 1%.”
Final Word
With more and more people are becoming aware about paying with apps on their mobile devices, it will be interesting to see how many people actually use that feature. While more players are jumping into the mobile payment arena each day, this type of payment system still has a long way to go to establish itself as a preferred mode of payment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
