Target Announces Mobile Pay App

by Raymond Pucci 0

Another Mobile Pay app thrown into the ring. That would be Target’s announcement to launch their own mobile pay app. According to the following article, details are still sketchy, but Target has a number of options as it enters the world of single merchant mobile apps.

Shoppers will be able to use their phones to pay in Target stores later this year, but it won’t necessarily be with Apple Pay or Android Pay.

Instead, Target plans to introduce mobile payment features to one or more of its own apps, the retailer’s Chief Information and Digital Officer Michael McNamara told Recode last week at a National Retail Federation conference in New York City.

It’s not clear if Target will add the payment feature to its main Target app, its popular Cartwheel coupon app or both. A spokesman declined to comment further.

Target will be following in the footsteps of other big retailers like Walmart and Kohl’s who have added mobile payment features to their own apps over the last year, in the wake of offerings from Apple, Google and Samsung. All three of the big-box stores had originally backed a separate payment app, CurrentC, but it never launched widely.

In the case of Kohl’s service, Kohl’s Pay, shoppers can use the app to both pay and earn rewards points with a single scan at checkout. McNamara said it would make sense for Target to offer store shoppers a way to both pay and use a digital coupon in one step.

McNamara said the Target payment service will only be available to shoppers who have a Target REDcard — “at least initially.” REDcards are debit or credit cards that come with perks like 5 percent off Target purchases and free shipping on online orders.

Apple Pay is a payment option for online purchases in the Target app. But it’s not a payment option in Target stores.

The mobile pay app field is getting crowded, but the right mix of integrated features and functionality will win out over a number of mediocre merchant apps in use right now. Target’s advantage is its existing customer base, including its couponing app as well as millions of REDcard holders that can adopt a Target Pay style app. Brick and mortar retailers are experiencing challenging times, so a fully featured mobile pay app could provide a boost for Target.

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

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