Walmart Pay: Underscoring A Few Advantages At CVS, Starbucks And Taco Bell

by Joseph Walent 0

At its core, the introduction of mobile payment schemes wrestle with the modification of established consumer behavior. Convincing customers to change what they have been doing when at the checkout has been achieved by some businesses, while others struggle.

Indeed, Starbucks, Dunkin’ Donuts and even Taco Bell have all associated significant sales boosts with their mobile payment apps. Now major retailers outside of food service are testing the technology – CVS Pay recently launched in select markets. In fact, more than 25% of smartphone users rely on a payment app at least once a month, according to recent research from Parks Associates. And while Apple Pay may come quickly to mind, the report states that consumers use retailer-specific apps more frequently.

So why is the largest retailer in the world struggling to ring up sales by smartphone? The reason may have less to do with size and more to do with how Walmart fits into consumers’ daily lives. I see three differences between Walmart Pay and the others: a link to a rewards program, shopper frequency and added features such as order-ahead service. Let’s explore each.

Mercator Advisory Group recognizes how a merchant chooses to structure its mobile payment scheme, and how it interacts with incentivizing aspects of using the scheme make or break merchant mobile wallets. Developments by retailers to more smoothly integrate their loyalty programs with universal payment schemes like Apple Pay and Android Pay will create additional models in how best to migrate consumers to a higher touch transactional experience. We anticipate the expansion the major networks mobile wallet schemes will further enhance the options available to merchants. However, organizations that have seemingly found the winning combination of incentives and prompts will continue to realize success with their merchant mobile apps.

Overview by Joseph Walent, Senior Analysts, Emerging Technologies Advisory Service at Mercator Advisory Group

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