Walmart gains clout as mobile app becomes more popular
The Walmart Stores app is close to surpassing Apple Pay in usage for mobile payments in the US, 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. Twothirds 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 US 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, CEO of researcher Crone Consulting, estimates Walmart will pass Apple Pay in active US users — those making at least two transactions every month — by the end of 2018.
Wal-Mart 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, Macy’s and Walgreens Boots Alliance are among retailers that accept it.
Walmart Pay was unveiled in December 2015, more than a year after Apple’s service debuted. Walmart resisted the lure of Apple in favour of its own offering — and it’s paid off.
APPLE PAY
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.
“You can imagine that we have conversations with a variety of companies about products and services that we think would be of interest to our customers. Apple, as big of a company as they are, is one of those companies,” Wal-Mart said.
Both companies are pursuing a $49bn market for mobile payments that’s been slow to develop in the US.
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, Wal-Mart 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.
Wal-Mart, in control of its own destiny and stores, has been able to train its associates and customers to use Walmart Pay. It has 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.
Wal-Mart began narrowing Apple’s lead earlier this year. Some 5.1% of Wal-Mart shoppers said they used Walmart Pay in June, compared with 5.5% of iPhone users at stores that accept Apple Pay, which launched more than a year earlier, according to a survey by Pymnts.com and InfoScout. Walmart Pay’s rate of adoption is higher than Samsung Pay and Android Pay combined, the survey found.
QUICKER CHANGES
“Apple Pay’s road is much more difficult than Wal-Mart’s is,” Brendan Miller, an analyst at Forrester Research, said.
“It means that Wal-Mart can make quicker changes, they can move faster in many respects than Apple Pay.”
Forrester’s survey of 58,000 online consumers in the first half of 2017 found that 7% of them used Apple Pay in the past three months, while a total of 6% used Walmart Pay.
Wal-Mart is more interested in competing with Amazon.com than Apple.
Earlier this year, Amazon acquired Whole Foods to hasten its expansion into the grocery market, and last year, it debuted Amazon Go, an employee store in Seattle where no checkout is required.
All purchases are automatically tracked with an app — likely a preview of Amazon’s stores of the future.
Apple has helped other retailers prepare to more effectively compete with Amazon. In October, Apple said that retailers like Safeway will be rolling out its mobile payment service.
WAL-MART HAS PROMOTED THE SERVICE CONSISTENTLY IN STORES AND ONLINE