Mobile Payments

Walmart’s March To Mobile Payments

When Walmart Pay first appeared on the scene a little over a year ago, it seemed something of the mobile payments odd man out. While the rest of the world was trumpeting the power and potential of NFC and contactless payments, Walmart Pay was built around the humble QR code and accepted at only one store.

Now, granted, that “one store” has 4,500 locations in the U.S. (that is, one within 15-20 minutes of 90 percent of the U.S. population), 6,300 stores worldwide and does $485.6 billion in net sales per year. To put that into context: If Walmart were a nation, it would rank 24th in size by GDP — slightly bigger than Belgium and only slightly smaller than Sweden. Simply stated, Walmart Pay didn’t need other merchants to get to scale on the merchant side, because acceptance at Walmart is pretty much instantly getting to scale.

But what about those pesky consumers? That was the leading question as Walmart Pay undertook the slow roll-out over 2016: Would those 100 million consumers that walk through Walmart’s doors each week want to use mobile payments? Statistically speaking, regular Walmart customers tend to be older, cash-centric and less prone to early adoption of tech products than counterparts who do more of their routine shopping at Kohl’s or Target. The early concern among analysts was that Walmart Pay would simply leave Walmart shoppers cold — because they just weren’t mobile payments type of people.

The first round of Walmart Pay adoption data from Walmart more or less put that idea to bed. Among the 20 or so million Walmart app/Walmart.com shoppers, Walmart Pay was immediately popular. And not just to use — customers also got into evangelizing for the service, according to SVP of Walmart Services Daniel Eckert, who noted that 82 percent of app customers (Walmart didn’t specify which type of customers) recommend the service, and seventy-five percent of customers have given Walmart Pay a five-star rating in the Walmart app.

“There is something very powerful about the ease and simplicity of Walmart Pay,” Eckert told PYMNTS. “What’s even more powerful though, is what this means for our customers. We want to make every day easier for busy families. We’re connecting all the parts of Walmart into one seamless shopping experience with great stores, easy pickup, fast delivery, frictionless checkout and apps and websites that are simple to use.”

And, as of this week, those connections have gotten deeper. Thus the power of Walmart Pay has grown with the addition of two upgrades — one to Walmart’s Pharmacy, the other its money transfer services.

Skipping the Line

If the press to make mobile payments a reality has proven anything in the world of commerce, it is that consumers actually don’t think all that much about payments (past whether their chosen method is accepted or not). Paying with a phone might be different than paying with a card, but for most consumers, it is not necessarily any better — it is simply another variation on an old experience.

A new experience — wrapped around a payment — is a horse of a different color, as Starbucks has proved to the world over (and over again) throughout the last several years. Consumers may not have strong feelings about paying, but they do like getting reward points and free coffees and they really, really like ordering ahead and not waiting in line.

Walmart, it seems, has learned something from where Starbucks is succeeding, and is borrowing a page from their book with their two upgrades.

The first switch will allow customers to refill and manage their prescriptions from their mobile devices and skip the line when they reach the pharmacy counter. Going forward, customers can enter their prescription information in the revamped Walmart app. When they go to the store to grab the prescription, they simply open the app, tap “prescription ready for pickup” then enter their PIN.

From there, customers scan the Walmart Pay QR code, a Walmart associate hands them their medication and the transaction is done. Payments are handled by Walmart Pay, and the eReceipt is sent to the app. The best part? App users get to wait in the “Express Lane,” which lets them move to the front of the line, ahead of those already waiting.

The second change, coming soon, is to Walmart’s Money transfer service — which is now taking a turn for the paperless. Customers will now be able to fill out their paperwork in the app and then tap “money ready to send.” From there, the process should sound awfully familiar: customers uses their phone’s camera to scan a QR code, Walmart completes the transaction in the Cloud with Walmart Pay, and then a receipt and reference number is sent to the app, where it can be texted or emailed to the recipient.

Easy peasy, lemon squeezy — but more important, fast. Money transfers, according to Walmart’s internal data, take 10-15 minutes door-to-door because of the paperwork. With Walmart Pay and an “Express Lane” in the mix, that number has fallen to beneath a minute for many customers.

“We’re leaning into a behavior and habit that began with Walmart Pay, and it was all centered around how to improve the overall experience at checkout,” Eckert told reporters earlier this week. “This is just going to add on to that overall experience.”

What’s Next

As eye-catching as the newest mobile moves out of Walmart are, analysts and commerce junkies are also very curious about what Walmart is setting up to use Walmart Pay to enable next.

Walmart is testing a Scan & Go technology at present that allows customers to scan items from their mobile devices as they add them to their cart.

They then click a button to process their payment and have an employee check their receipt as they exit the store — i.e. no line. If that sounds a bit familiar to you, it should: Amazon has a remarkably similar concept for its forthcoming grocery stores.

But, unlike Amazon Go, Walmart’s solution is already live in the wild in three stores — and has also been rolled out across Sam’s Clubs stores nationwide.

“Our customers continue to tell us that the need to save time has become just as important as the need to save money,” Eckert said.

What’s more, Walmart is committed to using its considerable powers to save them both — and perhaps notch a mPay win and a retail victory at the same time.

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