Walmart, a retail giant, has confirmed that it won’t be adding Apple Pay to its payment options anytime soon. This decision is noteworthy given that Walmart is one of the last remaining major retailers in the US to not support Apple Pay or any form of NFC payment, including Google Pay and Samsung Pay. So, what’s behind this decision, and how does it fit into the larger trend of contactless payments?
The Rise of Contactless Payments
Contactless payments have gained significant traction, with the COVID-19 pandemic accelerating the shift towards digital payment methods. A report by the Federal Reserve found that contactless payments made up 41% of all debit card transactions in 2020, up from 24% in 2019. Apple Pay, in particular, has become a popular choice for consumers, with over 100 million users worldwide. This growing trend raises questions about Walmart’s decision to opt out.
One reason for Walmart’s decision may be its existing investment in its own payment platform, Walmart Pay. Launched in 2015, Walmart Pay uses a QR code infrastructure rather than NFC technology like Apple Pay. This means that users must add a debit or credit card to the Walmart app and scan a QR code at checkout to pay. While this method works, it’s less convenient than Apple Pay, which simply requires users to tap their phone to a terminal to complete a transaction.
Walmart’s Homegrown Solution
Walmart Pay has been a key part of the company’s strategy to reduce payment processing fees and increase customer loyalty. By controlling the payment process, Walmart can collect valuable data on customer purchasing habits and tailor its marketing efforts accordingly. Additionally, Walmart Pay allows the company to avoid paying fees to third-party payment processors like Visa and Mastercard.
Despite the benefits of Walmart Pay, the platform has struggled to gain traction with consumers. The complexity of the payment process, which requires users to download the Walmart app and add a payment method, may be a contributing factor. In contrast, Apple Pay is integrated directly into the iPhone, making it easier to use. Additionally, Walmart’s refusal to support Apple Pay may be alienating some customers who prefer the convenience of NFC payments.
A Tale of Two Countries
Walmart’s approach to contactless payments differs significantly depending on the country. While Walmart locations in the US do not support Apple Pay, many locations in Canada do. This raises questions about why Walmart is taking a different approach in different markets.
One possible explanation is that Walmart is testing different payment strategies in different markets. By supporting Apple Pay in Canada, Walmart may be gauging consumer interest in the platform and assessing the potential impact on its own payment business.
Walmart’s alternative platform, Scan and Go, which is available to Walmart+ subscribers, also doesn’t support Apple Pay. This service allows users to scan items as they shop and pay using their phone, but it requires a subscription and doesn’t offer the same level of convenience as Apple Pay.
A Comparative Analysis of Payment Platforms
To better understand Walmart’s decision to stick with its proprietary payment platform, it’s essential to examine the features and adoption rates of various payment systems. The following table compares some key aspects of Apple Pay, Google Pay, Samsung Pay, and Walmart Pay:
| Payment Platform | Technology Used | Users (approx.) | Merchant Adoption |
|---|---|---|---|
| Apple Pay | NFC | 100 million+ | Widely accepted at major retailers |
| Google Pay | NFC | 50 million+ | Widely accepted at major retailers |
| Samsung Pay | NFC & MST | 10 million+ | Widely accepted at major retailers |
| Walmart Pay | QR Code | Unknown | Exclusive to Walmart |
As shown in the table, Apple Pay, Google Pay, and Samsung Pay have gained significant traction and are widely accepted at major retailers. In contrast, Walmart Pay remains exclusive to Walmart and uses a different technology, making it less convenient for users who frequent other stores.
The Canadian Exception
Most Walmart locations in Canada accept Apple Pay, unlike those in the US. A report by the Bank of Canada found that 64% of Canadians used contactless payments in 2020, compared to 41% in the US. Additionally, a survey by Leger found that 44% of Canadian respondents used mobile payments in 2020, compared to 34% in the US.
The Future of Contactless Payments
The use of contactless payments is expected to continue growing, and Walmart will likely face increasing pressure to adopt a more widely accepted payment method like Apple Pay. However, the company’s investment in its own payment platform and its desire to control the payment process may lead it to continue down a different path.
According to a report by McKinsey, the global payments market is expected to grow to $14.3 trillion by 2025, with contactless payments driving much of this growth. As consumers become increasingly comfortable with digital payments, retailers like Walmart will need to adapt to changing consumer preferences to remain competitive.
In conclusion, Walmart’s decision to stick with its proprietary payment platform, Walmart Pay, is a strategic move that reflects the company’s priorities of controlling the payment process and collecting valuable data on customer purchasing habits. While this approach may have benefits for Walmart, it may not be the most convenient option for consumers who are accustomed to using Apple Pay or other contactless payment methods.
The future of payments will be shaped by consumer preferences, and retailers like Walmart will need to adapt to remain competitive.
For more information on the topic, you can visit:
The Federal Reserve’s report on contactless payments
McKinsey’s report on the future of payments
Wikipedia’s article on Apple Pay
Walmart’s official website
