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ZDNET’s key takeaways
- Walmart has officially adopted tap-to-pay with both Apple Pay and Google Pay.
- It was the last major retailer to accept them, instead pushing its own Walmart Pay.
- There is a way Walmart can still push its own payment system and reap the benefits.
This morning, Walmart announced it will begin accepting tap-to-pay payments from credit cards, Google Pay, Apple Pay, and other NFC systems. Meanwhile, Walmart’s QR code payment system is the last major holdout from the tap-to-pay revolution that has swept across the US over the past several years. At this point, about 85% of retailers in the US accept tap-to-pay.
Obviously, tap-to-pay is popular because of its speed at checkout — it takes less time to tap your phone to the POS than to fish out a credit card (or, God forbid, count out cash). Plus, it adds security by encrypting your payment information into a one-time-use token that only banks can decipher. That way, even if the company suffers a data breach, only the token is compromised — not your actual payment information.
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As someone who has proudly not carried cash for almost 10 years and has used my phone for payments, I’ve been interested in various payment platforms — including Walmart Pay. I always carry credit cards with me for those rare times I can’t use my phone, but they’ve stayed pretty secure in my wallet for a while now.
I’ve used Walmart Pay frequently, but it’s never been a great experience. The payment form is buried in the app, and over the years, it has moved to different places within the app, adding another layer of annoyance. Sometimes you can access it by scanning the QR code on the payment terminal with your phone’s camera, which will (sometimes) get you to the right place in the app. Other times, it will simply direct you to the Walmart app. With tap-to-pay, it works the same way, the first time, every time.
Why does Walmart Pay still exist?
Walmart Pay has been around for a long time despite the rising popularity of tap-to-pay. Walmart pushed its own payment system so it could avoid processing fees from Apple Pay and Google Pay — which are minimal, but when you sell billions of dollars in product every year, they add up.
The other benefits of Walmart Pay are less financial. For example, when you use Walmart Pay, it defaults to sending an electronic receipt versus a paper one. Again, over billions of dollars of transactions, this adds up. Plus, Walmart gets to keep the data behind the transactions. It’s another kind of loyalty program that adds up to a colossal amount of data about your buying habits, and the like.
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So, the fact that Walmart has caved to the pressure of tap-to-pay speaks volumes. One way the retailer could continue to push its own payment platform is to do with products what it already does with gasoline. Walmart has gas stations across the country, and those who use Walmart Pay enjoy an additional 3 cents off per gallon. That’s not a lot, granted, with national gas prices exceeding $5.00 per gallon. However, it’s often enough to push the price of gas down below its competitors — at least in my neighborhood.
As for Walmart Pay itself, it’s sticking around. Walmart’s own announcement says tap-to-pay “is a great addition to payment options already offered like cash, credit card, or Walmart Pay.” So, the QR code abides. Even if Walmart decided to deprecate the payment system, it would likely just morph into a loyalty program like Target Circle. There’s simply too much customer data at stake to eliminate it entirely.
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It’s likely that those who use Walmart Pay will continue to use it. People like me, however, will likely switch to tap-to-pay systems because there is less friction and virtually no incentive to use Walmart Pay — except for gas. If Walmart really wants to keep people on Walmart Pay, it will need to find a way to save consumers a bit of scratch in the immediate future. Would a 1% discount on products for using Walmart’s payment system be enough to encourage people to use it?
It would be enough for me, even though I’m a strong proponent of tap-to-pay systems. But in this economic environment, even saving a little bit helps, whether you’re a regular Joe or Jane on the street or a massive retailer selling billions of dollars’ worth of product every year.
