Will Target’s Mobile Payments Play Have A Natural Edge With Millennials?

Target is not the first retailer to go to market with a mobile payments app. Walmart and Kohl’s both made big entrances in 2016 with their respective “Pay” services. But the experts think that, in Target’s case, being third may not be much of an obstacle as it carries a natural advantage with the younger consumers who are most likely to adopt a mobile payments platform to start with.

And it has Cartwheel.

“If Target can build a payment system that makes redeeming offers and checkout easier, there’s a good chance it will get serious adoption rates,” said eMarketer Analyst Yory Wurmser.

Rumors about Target’s entrance into the mobile payment derby have been circulating for at least a year, and at this point, not much is known about the app beyond its rumored forthcoming existence. The app may become part of the Target main app, part of Cartwheel or possibly both. Cartwheel has seen strong customer adoption and currently has 30 million users.

During initial rollout, the service will only be offered to shoppers with a Target REDcard.

Millennials — Target’s main user base — are also mobile payments’ most likely users. According to eMarketer data, about a third of millennial smartphone users will use mobile payments this year. They will also account for about half of the mobile payments users in the United States.

However, that data noted that, for all the growth projected for the year in mobile payments — driven by those young consumers — the actual portion of the market they represent will be surprisingly small. Only 1.2 percent of commerce spend will be done on mobile.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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