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Walmart's popular app is set to include payment functionality (much like the Starbucks app).
Trials begin in selected stores this month, but what are the implications of Walmart Pay for mobile and retail?
1. The end for consolidated loyalty?
The Merchant Customer Exchange (MCX) Consortium includes Walmart, BestBuy and Target, and is curretly working on CurrentC, a loyalty and payment app.
Where the announcement of Walmart Pay leaves CurrentC is unclear, though Walmart says the beta trial is still going ahead.
However, perhaps consolidated loyalty apps will become the preserve of smaller retailers.
2. Increased mobile commerce?
Neil Ashe, head of ecommerce at Walmart, told the FT that of those Walmart customers who had ordered online in 2015, nearly half came from Walmart’s mobile app.
This is a 100% increase on 2014 and is higher than the industry average.
Although Walmart Pay is of course designed to allow app users to pay in store, if this feature allows the retailer to build on its already impressive 22m active user base, there's no reason why these users won't then shop online via the app.
The implication could be that slowly, slowly, desktop shopping for groceries may be on the way out.
3. E-receipts to hit the mainstream?
Receipts are perhaps not a big deal in the world of groceries, however Walmart does sell a wide range of products, many of which may have higher return rates (e.g. electronics).
Walmart Pay will send e-receipts directly to the app. If mobile payment sees an uptake over the next few years, e-receipts are one obvious benefit to the customer.
Retailers such as Schuh already offer e-receipts (after 'manually' asking for the customer's email address) and it's not hard to imagine the smartphone's impact on budgeting and accounting in future.
4. In-store engagement to increase?
Those 22m active app users, according to Neil Ashe, are using the app twice as much in-store around Christmas 2015 as they did in the last holiday shopping period.
If this increased in-store engagement is given an extra boost by Walmart Pay (as customers use the app more often), the smartphone could become established as a shopping guide, offering relevant information and discounts.
5. A boon for Apple Pay?
Apple Pay is not currently available in Walmart, as the retailer did not want to opt for a payment method that would alienate Android users.
However, Apple Pay will be incorporated into the Walmart app as part of Walmart Pay, allowing customers to use the functionality in store and online.
This could be a boon to Apple's efforts to popularise its payment method in retail.
6. Brand wallet adoption to increase?
Starbucks has been the only notable brand to popularise a mobile wallet.
Elsewhere, adoption of generic solutions has not been startling. Infoscout reported that Apple Pay was used for 2.7% of eligible transactions on Black Friday and Android mobile wallets at just 2% of eligible transactions.
The waters are still murky for mobile wallets, with the lack of a universal solution obviously a barrier to uptake.
However, for regular purchases (e.g. coffee or groceries), perhaps the business case for mobile wallets and loyalty is more convincing for brands that want to be at the bleeding edge of retail.
If Walmart Pay can master the UX (there are some doubts about its QR code execution) and incentivise usage, there's no reason it can't succeed.