The mobile-payment wars are heating up.
Wal-Mart Stores Inc. said it’s launching its own mobile-payment system that will allow shoppers to pay with any major credit or debit card or a Wal-Mart gift card through its existing smartphone app at the cash register.
Wal-Mart started testing the new payment feature on Thursday at its stores in the Bentonville, Ark., area, where the retailer is based. It plans to launch the payment system, called Walmart Pay, in all 4,500-plus U.S. stores early next year.
It’s part of Wal-Mart’s overall mobile strategy to make shopping easier and faster, but the launch is the latest salvo in a battle for mobile payments that’s in the early stages. Wal-Mart has moved into the field as Apple’s 1-year-old tap-and-pay system is being expanded to other merchants such as Best Buy and KFC. Several months ago, Google launched the Android Pay mobile wallet app, and Samsung came out with Samsung Pay. They all are trying to get a piece of what could be a lucrative business, but none has cracked the market.
The move signals that Wal-Mart thinks it’s best to build its own system to better serve its customers, even as it backs a retail-industrywide mobile-payment program that is in a test phase.
“We are creating a seamless shopping experience that includes payment,” Neil Ashe, president and CEO of Wal-Mart’s global eCommerce, said on a conference call on Wednesday. “It’s fast, it’s simple, and it’s a secure way for customers to use their smartphone.”
Twenty-two million customers use the Wal-Mart app in a month, and more than half of Wal-Mart’s online orders come from a mobile device. This holiday season, Wal-Mart added features such as allowing online shoppers to check in once they get to the parking lot so their online orders can be prepared for pickup.
Wal-Mart executives said that after evaluating other mobile options, they found that they had different constraints, working only on certain devices or payment types. Apple Pay requires iPhones. Google’s tap-and-pay services, Android Pay and Samsung’s Samsung Pay require Android phones.
However, Ashe and Daniel Eckert, Wal-Mart’s senior vice president of services, told reporters their system is designed to integrate with other payment applications such as Apple Pay if the retailer decides to include them.
Wal-Mart’s move could be a blow to Merchant Customer Exchange, or MCX, which a consortium of retailers and restaurants set up a few years ago to create an industrywide mobile-payment system. Wal-Mart has been a key player.
Wal-Mart executives said they remain excited about the MCX pilot program for the payment system called “CurrentC.” A pilot test being conducted in Columbus involves Wal-Mart and 10 other retailers.