Mobile pay at retail is still in the early stages but retail giant Wal-Mart is pushing to make its new payment platform more mainstream with a nationwide rollout during the first half of 2016.
Walmart Pay, the retailer’s version of Apple Pay and Google Wallet, will work inside the retailer’s mobile app with any Apple or Android device that uses debit cards, credit cards and even Walmart giftcards as the payment source. The company said Walmart Pay is a fast and secure way for customers to pay with their smartphone, and it will be introduced in select stores this month with nationwide launch in the first half of next year.
”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 retailer said 22 million customers already actively use the Walmart app each month and it ranks among the top three retail apps in the Google and Apple app stores. Ashe said the timing of Wal-Mart’s release of it own mobile pay platform couldn’t be better given what the retailer witnessed over the recent holiday weekend.
“E-commerce brought the stores to the web and now mobile is bringing the web to store,” Ashe in his webcast of the release on Thursday, Dec. 10. “Millions of our customers used their smartphones to simplify their shopping experience. Nearly half of our customers bought their online orders on a mobile device. That’s double the rate last year and significantly higher than the industry average.”
He said holiday shoppers in Walmart Stores used the retailer’s mobile app at twice the rate of last year. He said shoppers who choose to use Walmart Pay will open the app on their mobile device, activate the camera, scan the code displayed at the register at anytime during the checkout process. For more flexibility, Ashe said shoppers may set the payment options to pay for part of the purchase on debit, part on credit or gift card or cash.
“When a customer leaves home to shop at Walmart all they will need to take is their keys and their smartphone,” Ashe said.
Talk Business & Politics asked Ashe in June about Wal-Mart’s interest in a mobile pay option. He said then that Walmart was gathering customer input and building mobile pay capability into its mobile app and in-store technology so it can be turned on when the time is right and the customer wants it. He also said the retailer was part of an industrywide consortium regarding mobile pay.
“We will probably do something with mobile pay in the future, just not right now,” Ashe said in June. “We have invested a significant amount of effort into the development of CurrentC and that consortium and their product. We feel like they have made great progress down the path.”
While Apple Pay and Google Wallet have been in the market for many months, consumer and retailer adoption has been slow. Ashe said Wal-Mart will look at adding to its mobile pay options in the future as customers become more comfortable with the new payment platform.
An informal survey of consumers by Talk Business & Politics regarding mobile pay options indicates there is resistance to adoption. While there were no millennials in the survey cohort, the respondents between the ages of 35 to 70 said they were “not interested” in using mobile pay when shopping brick-and-mortar retailers. The biggest reason for the disinterest was the fear of hackers.
However, a respondent in Portland, Ore., said as a new resident in that city she’s noticed more consumers are using mobile pay and though she doesn’t have it yet, it is something she plans to adopt in the future. Another survey by Verifone Systems Inc. released in January found that mobile wallets accounted for about 4% of overall payments for U.S. in-store retail transactions.
Retail expert Carol Spieckerman, CEO of Spieckerman Retail, frequently lauds Wal-Mart’s efforts to test the waters, stretch its boundaries and look for solutions that best service its 260 million global customers each week. Spieckeman has characterized mobile pay in the U.S. like days in the Wild West with various payment platforms jockeying to capture market share with consumers leary after recent data breaches.
Spieckerman said Walmart implementing its own solution for mobile pay is a smart move, even if they decide to integrate additional payment solutions – like Apple Pay – at a later time.
“Doing so affords Walmart the opportunity to get customers acquainted with, and possibly addicted to, its solution initially. If the solution is easy to use and as shopper trust is developed, Walmart will have the opportunity to serve up personalized promotions and suggestions that will keep customers in its ecosystem and potentially drive incremental sales,” she added.
Spieckerman said the advantages of Walmart being an early mover outweigh any potential downside.
“For consumers, having to navigate an increasingly fragmented mobile payment landscape could prove tedious until the inevitable consolidation of solutions occurs.”
Jason Long, CEO of Shift Marketing Group, agreed with Spieckerman’s assessment.
“It’s good for Walmart to get moving on this. Adoption will be slow, but there will be a tipping point at some point down the road where consumers will expect to make payment with their smartphone. Retailers that don’t offer a smart solution will be at a competitive disadvantage,” Long said.