Now that Walmart no longer has to pretend to be support CurrentC—thanks to its effective demise, courtesy of MCX’s concession to reality—the largest retail chain announced Monday (May 16) that it had rolled out Walmart Pay across 110 Walmart stores in Arkansas and 480 Walmart stores in Texas. Walmart Pay the concept was announced by the merchant back in December.
Walmart Pay has been rolled out in a way very different than Walmart wanted to do a mobile payment, but it’s a model that has been obviously shaped by Apple Pay. Like Apple Pay, it supports “any major credit, debit, pre-paid or Walmart gift card.” But unlike Apple Pay, it works across iOS and Android devices. And unlike Apple Pay and every other NFC payment method, it can work on a far wider range of phones—especially older phones—that do not support NFC. All the phone needs is the ability to download an app and enough of a camera to scan a QR code.
But Walmart Pay suffers a major weakness that Apple Pay doesn’t. As long as the shopper is willing to use the default card in Apple Pay, all that the shopper need do is hold the phone right above the card reader. It doesn’t need to be connected to any network, nor does the shopper have to launch an app, key in a password or manipulate the app in any way. Contrast that with Walmart Pay, which requires the shopper to find and then open the Walmart app, select Walmart Pay and then manually activate the camera and then scan a register QR code—which as many shoppers will confirm, isn’t always that easy to do on the first or second attempt.
On the plus side, Walmart Pay integrates electronic Walmart receipts into the app and allows them to be viewed at any time.
Then there’s the big problem, which Walmart was attempting to avoid via CurrentC: Apple Pay works across a large number of merchants and Walmart Pay only works at Walmart. That said, if the merchant is large enough—and certainly Walmart is—a single-merchant payment method can certainly be effective, as Starbucks has clearly proven.
Given that it’s allowing many variants of MasterCard, Visa and AmericanExpress into the program, it’s not going to help Walmart with interchange costs. But it will do something that is arguably just as valuable to our friends at Bentonville. If it works, it will not only drive a lot more of its customers to use the Walmart app, but it will in effect deliver to Walmart a CRM program, which it has never had. It will suddenly be able to associate specific purchases with specific shoppers. This will open the door to customer-specific offers and potentially differential pricing.
A few years ago, Walmart had a very clever mobile experiment that used its self-checkout terminals for payments. The trial had shoppers scanning products in-aisle, allowing them to have a theoretically much faster checkout. If the shopper had 70 items in their cart, the last item would be scanned a split-second before it was placed in the cart. At checkout, only one barcode would be scanned, namely the one the Walmart app displayed, which would itself include the scans of those 70 products.
It was a wonderful idea because it had a great customer-centric angle—faster checkout—on top of a major Walmart benefit. (Not having a customer-centric angle was ultimately what doomed CurrentC.) The Walmart benefit was being able to charge consumer goods manufacturers big bucks for delivering very-effective in-aisle coupons. Instead of offering a $2-off coupon for the next shopping trip, a shopper scanning a Kellogg’s cereal box could be instantly offered a $1-off coupon on a competing General Mills cereal. The trick is to get that offer into the faces of shoppers before they have walked away from that part of the cereal aisle. Make it so easy to change the purchase decision and you’ll find that a smaller incentive could work just as well.
If Walmart can get its shoppers to pay from within the Walmart app, dozens of programs like that are possible. Alas, this program can’t include the rivals and their volumes that MCX originally promised—with Target, Dunkin’ Donuts, Meijer, Wendy’s, Sears, Best Buy, 7-Eleven, Lowe’s, Sunoco, Wawa, Bed, Bath & Beyond, Shell, CVS, Publix and others initially said to participate in the theoretical CurrentC offering—but if it does nothing more than appeal to a healthy chunk of Walmart’s installed base, that will do quite nicely.