In this corner, the world’s largest IT company. And in this corner, the world’s largest retailer. A battle royal could be shaping up between Apple and Wal-Mart as the retail giant plans to roll out its own mobile payment system.
The system, which is currently being tested at stores in Arkansas, home of Wal-Mart's headquarters, will allow shoppers to pay with all major credit or debit cards through its app at the cash register.
Wal-Mart will debut the new feature in all of its 4,500-plus U.S. stores in the first half of 2016. The retail behemoth moves into the mobile payment field at the same time as Apple’s system is expanding to such chains as Best Buy and KFC. It also comes several months after Google launched the Android Pay mobile wallet app and Samsung debuted Samsung Pay. Merchant Customer Exchange is also testing its own system, as is JPMorgan Chase.
Still a Toy?
With Wal-Mart’s system, a shopper downloads the Wal-Mart app at the cash register and then choose Wal-Mart Pay. After that, the consumer activates the camera on the app to scan the quick-read (QR) code on the reader after the first item is scanned by the cashier. Once all items are scanned, an e-receipt application is sent to the customer’s phone.
We reached out to independent technology analyst Jeff Kagan, who told us because mobile payment is a relatively new space, competitors are likely to fight it out for a while, and therefore, the segment will take time to develop.
"I think at this early stage [mobile payment] is still thought of as a toy. It's only available in a small percentage of retail stores nationwide," said Kagan. "Retailers must decide which technology to implement. Some may only work with one and some will work with many. Customers must decide which technology they want to use."
Wal-Mart said it will become the first retailer to launch its own mobile payment system that works with iPhone or Android devices. About 22 million customers use the Wal-Mart app each month, and more than half of Wal-Mart’s online orders are now coming from mobile devices. For the holiday season, Wal-Mart has introduced new features such as allowing online shoppers to check in from store parking lots to ensure that online orders are ready for pickup.
In a conference call with reporters yesterday, Wal-Mart executives said that their investigation of various mobile options indicated that each one had its own limitations, such as working with only certain devices or payment methods. Wal-Mart’s mobile payment system, though, is designed to integrate with other payment applications, including Apple Pay, if retailers decide to use both, according to the company.
The number of tap-capable mobile payment machines in the United States is expected to surpass 1.5 million this year. "This is an exciting time in the changing mobile pay space," said Kagan. "The companies that are in the space are just in the first inning of a long game."
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