Walmart Pay threatens to surpass Apple in mobile payments

Gamble pays off as it gains thousands of users daily

Walmart Stores’s app is close to surpassing Apple Pay in usage for mobile payments in the U.S., giving the world’s largest retailer even more clout as a growing number of people shop with their smartphones.

Available in 4,774 stores, Walmart Pay is enrolling tens of thousands of new users a day, up from thousands four or five months ago, said Daniel Eckert, who runs the business. Two-thirds of the customers who try it also use it a second time within 21 days, he said, giving him confidence Walmart Pay will surpass Apple Pay in the U.S. in terms of use by shoppers in stores where they’re accepted.

“If daily enrolments don’t slow down, I think that’s pretty well in the cards shortly,” said Eckert, senior vice president for services and digital acceleration. “I would have to imagine we are getting pretty close.”

Richard Crone, chief executive officer of researcher Crone Consulting, estimates Walmart will pass Apple Pay in active U.S. users — those making at least two transactions a month — by the end of 2018.

Walmart is the biggest retailer rejecting Apple Pay. Since it rolled out in 2014, Apple has been able to dictate its terms to retailers and banks eager to adopt it. Best Buy and Macy’s are among the retailers that accept it.

Walmart Pay was unveiled in December 2015, more than a year after Apple’s service debuted. The retailer resisted the lure of Apple in favour of its own offering — and it’s paid off.

Months after Walmart Pay’s debut, the retailer held discussions with Apple about incorporating Apple Pay into the app, according to people familiar with the matter. The talks continued until March of 2016, ending without a deal due to the difficulty of blending the technology underpinning each company’s approach, said one of the people, who asked not to be identified as the discussions were private.

Both companies are pursuing a $49-billion market for mobile payments that’s been slow to develop in the U.S. Many consumers still worry about mobile payments’ security, and find that using a plastic card is often as fast and easy as pulling out their phone to pay. Like many retailers, Walmart still doesn’t accept the wireless payment technology built in to mobile phones, stymieing Apple’s efforts. Instead, Walmart Pay scans a code on the phone to complete a transaction.

Walmart, in control of its own destiny and stores, has been able to train its associates and customers to use Walmart Pay. It’s promoted the service consistently in stores and online. Unlike Apple Pay, which only works with Apple’s devices, Walmart Pay works with both iOS and Android phones — a feature that hastened adoption.

“They flawlessly deployed the system, and it works,” Crone said. Walmart Pay also incorporates in-store offers, promotions, rewards and gift-card balances all in one place, making it convenient for users, he said.

Walmart began narrowing Apple’s lead earlier this year. Some 5.1 per cent of Walmart shoppers said they used Walmart Pay in June, compared with 5.5 per cent of iPhone users at stores that accept Apple Pay, according to a survey by Pymnts.com and InfoScout.