On Wednesday (July 6), Walmart announced that its trial of Walmart
Pay would go national. This is good news for Walmart shoppers who want
to pay with a mobile device, but the news would have been very different
had Walmart instead embraced NFC payments. Walmart opted to go with its
own payments system.
"There is something very powerful about the ease and simplicity
of Walmart Pay," said Daniel Eckert, senior vice president of services
at Walmart U.S., in a prepared statement. What Eckert didn't say,
though, was what exactly Walmart Pay was easier and simpler than.
If
we contrast Walmart Pay with two popular NFC options — Apple Pay and
Android Pay — we come up with a lot of strengths and weaknesses. Whether
Walmart Pay would be better for a specific shopper than, let's say,
Apple Pay, depends on that shopper's handset.
How is Walmart Pay better?
It
works on just about any Android or iOS smartphone or tablet, including
much older devices. All it really needs is the ability to download apps —
which is pretty much the entry-level definition of a smartphone — and a
decent camera (to focus on the QR code). NFC approaches require the
latest hardware from the few handset makers that support NFC. Most
existing iPhones, for example, can't handle Apple Pay.
Walmart Pay also integrates electronic Walmart receipts into the app and allows them to be viewed at any time.
Before
we go into the ways Walmart Pay is worse than NFC, let’s not dismiss
how huge an advantage this hardware-agnostic difference is. Walmart's
massive size and relatively low-cost merchandise means that it needs to
be accessible to as many people as possible. This approach delivers
that. If Walmart Pay gets to have only one major advantage, this is
arguably the best one to have.
How is Walmart Pay worse?
It was odd that the Walmart Pay statement
opted to stress "ease and simplicity," because those are both areas
where it is a lot weaker than almost any of the common NFC options.
Let's
compare the Walmart Pay experience with the Apple Pay experience. As
long as the shopper is willing to use the default card in Apple Pay, all
that the shopper need do is hold the phone right above the card reader
and do a one-second finger scan. It doesn’t need to be connected to any
network, nor does the shopper have to launch an app, key in a password
or manipulate the app in any way.
Contrast that with Walmart Pay, which requires the shopper to find
and then open the Walmart app, select Walmart Pay and then manually
activate the camera and then scan a register QR code — which, as many
shoppers will confirm, isn’t always that easy to do on the first or
second attempt. Shoppers will also have to enter a PIN or, sometimes, do
a finger scan.
Walmart Pay also can't be used for fuel, whereas
NFC payment options have no product restrictions. Granted, other than
Chevron, there aren't an awful lot of gas stations accepting Apple Pay,
but there are some. Not with Walmart Pay.
And courtesy of Walmart's own Walmart Pay page,
here are some restrictions for Walmart Pay that are generally also
restrictions for most NFC wallets. "Digital coupons will not work. Paper
coupons will have to be scanned as they are done today," Walmart said,
adding that other current no-nos include cashback, loyalty/rewards and
PayPal.
Walmart Pay also can't handle direct access to bank
accounts. That's a reversal from the early Walmart mobile wallet plans,
back when it still dreamt of using mobile wallets to sidestep, or at
least sharply curtail, interchange fees.
Also, based on its
initial trials, Walmart Pay anticipates enough QR code glitches that it
published a plan for them. "What if the QR Code does not work? Enter the
803 Action Code to print out a QR code for the customer to scan with
their phone. Discard this QR Code after the customer successfully scans
it. It is only valid for one transaction," the public Walmart Pay page
said. It's not clear how this helps, though. If the phone (operator
error?) isn't playing well with a screen-displayed QR code, not seeing
how a printed version would do better. But it's worth a shot.
Then
there’s the big problem, which Walmart was attempting to avoid via the
dearly departed CurrentC: Apple Pay works across a large number of
merchants, but Walmart Pay only works at Walmart. That said, if the
merchant is large enough — and certainly Walmart is — a single-merchant
payment method can certainly be effective, as Starbucks has clearly
proved.
If it works, it will not only drive a lot more of its
customers to use the Walmart app, but it will in effect deliver to
Walmart a CRM program, which it has never had. It will suddenly be able
to associate specific purchases with specific shoppers. This will open
the door to customer-specific offers and potentially differential
pricing, albeit down the road.