Is Walmart going it alone with mobile payments? Your Contactless Intelligence Weekly News Review

Is Walmart going it alone with mobile payments?

Walmart began testing its new mobile payment system last Thursday at stores around Bentonville, Arkansas, where the retailer is based. It plans to launch the payment feature in all 4,500+ US stores in the first half of next year. The app - called Walmart Pay (that’s original!) will allow shoppers to pay with any major credit or debit card or its own store gift card through its app at the cash register. Walmart claims it has become the first retailer to launch its own mobile payment system that works with an iPhone or Android device and with a major credit or debit card.

Walmart’s move into mobile payments comes after Apple announced that Apple Pay was expanding to other merchants such as Best Buy and KFC and comes several months after Google launched the Android Pay mobile wallet app and Samsung came out with Samsung Pay. Walmart obviously believes it is a better strategy to build its own payment system to custom fit with its needs - sorry, its customer’s needs - despite backing the ‘CurrentC’ payment solution from the ten retailer alliance called Merchant Customer Exchange (MCX).  Neil Ashe, president and CEO of Walmart’s global e-commerce group is reported to have said, “We are creating a seamless shopping experience that includes payment. It’s fast. It’s simple, and it’s a secure way for customers to use their smartphone.”

For those not familiar with the CurrentC solution - on which Walmart Pay appears to be based - it eschews NFC technology for, wait for it - QR codes! 

Walmart U.S. senior vice president for services, Daniel Eckert, said in a Walmart Corporate video that existing mobile wallets are limited to certain types of phones, operating systems or payment types, which places constraints on users. He added that Walmart Pay has been designed to be integrated with other payment wallets as well. Hence the QR code scanning approach. A promotional video also exists touting the benefits of the app.

Customers at the store have to open the Walmart app and choose the pay feature. After activating the camera, the user can at any time during checkout scan the code displayed at the register to connect Walmart Pay. The process is complete when a store employee scans and packs the purchases. An electronic receipt will be sent to the app and can be viewed at any time, Walmart said. The soon to be released Chase Pay (seriously, no-one can think of a better name?) from bank JPMorgan Chase, will also forgo the use NFC when it debuts next year. Rather, it too will rely on QR that can be scanned by a register.

Interestingly, Walmart Pay users will be able to set the feature to prioritise payments using just gift cards and use credit and other cards as the second payment option. They can also set the app to pay by a combination of cash and Walmart Pay. Walmart is apparently counting on demand for the payment system from the 22 million customers that use the Walmart app each month, and more than half of Walmart’s online orders are now coming from a mobile device. This holiday season, Walmart added new features like allowing online shoppers to check in once they got to the parking lot so they could have their online orders ready for pickup. The app ranks among the top three retail apps in the Google and Apple app stores. “Millions of the company's customers used their smartphones for shopping in the last holiday weekend and nearly half of online customers used their mobile devices,” commented Ashe.

Ashe and Eckert told reporters the system is designed to integrate with other payment applications like Apple Pay if the retailer decides to include them. They also said they were still excited about being in the Merchant Customer Exchange program. “We are listening to the needs of the customer,” Eckert said. “We are looking at innovating the checkout experience and using payment to do that.”

Maybe so, but I can’t help but think that MCX is going to feel that they had the rug pulled from under them, so to speak. Or is the fact that Walmart appears to have ‘jumped the gun’ an indication of just how factious the MCX and their CurrentC solution really is? Either way - QR codes? Really?

Finally, a reminder of all of you looking to enter the CMAs for 2016 will need to register your interest before December 31st. Nothing else needs to be done at this stage - just a notification of intent. And yes, that even includes you with a QR code solution. Prove us all wrong!

Until next time,

Steve Atkins
Contactless Intelligence