PaymentsJournal

Target Integrates Mobile Payments On Its App

Mobile payment, Cashless society concept. Hand holding smart phone with mobile payment on screen and NFC signals icons against abstract furniture mart background.

Attention Target shoppers—you can now pay in-store with your mobile app. As has been expected, Target introduced a mobile payment feature to its existing app which has mainly served as a discount and coupon platform, as the following article describes.

Target on Monday introduced a mobile payments system to its iOS and Android app, dubbed Wallet, that aims to decrease checkout times at its stores. Wallet uses a barcode scanned at check out that includes payment and applicable coupons.

Wallet can make checkout four times faster than other payment types, according to Target. Wallet is currently restricted to Target’s REDcard credit card and debit card. Wallet combines savings mechanisms like Target’s “Cartwheel offers”, weekly ad coupons, and 5 percent “REDcard” discount. Target said the ability to redeem Target gift cards with Wallet is coming soon.

“Wallet in the Target app makes checkout easier and faster than ever,” Mike McNamara, Target’s chief information and digital officer, said in a statement. “Guests are going to love the convenience of having payment, Cartwheel offers, Weekly Ad coupons, and GiftCards all in one place with Wallet.”

Earlier this year, Target overhauled its mobile app with one-stop-shop of what the retailer offers, a feature that shows shoppers their location as they shop and highlights Cartwheel deals nearby, and online purchasing. It has already included Apple Pay integration on iOS.

Target’s move into mobile payments is on the heels of Walmart and its 4,600 stores nationwide. However, Walmart allows customers to make payments on Apple and Android devices with almost all major credit, debit, and pre-paid cards or Walmart gift cards. CVS and Starbucks offer similar mobile payment mechanisms.

Target has decided to go the single merchant app route and continues to spurn both Android Pay and Apple Pay which require NFC enabled POS terminals. The Target app accepts only its in-house credit and debit cards. So the win for Target is they have lower transaction processing costs with their own system, plus they get rich customer intelligence from the payments data that they do not have to share with other providers. Holiday shopping will be a good test of the pay app’s usability and adoption.

Overview by Raymond Pucci, Associate Director, Research Service at Mercator Advisory Group

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