Walmart Pay is Rolled Out – Now What?

Customers at all of Walmart’s 4,600-plus U.S. stores can now use the Walmart Pay digital payment service.



This is an impressive feat, especially considering Walmart Pay was only announced in December 2015 and didn’t start undergoing official rollout until May 2016. While everyone agrees Walmart Pay reaching full implementation is a big deal, there is less agreement on how this will affect the digital payment landscape.



While Walmart does not dominate the retail industry the way it did 10 years ago, it is still by far the most influential retailer in the U.S. (sorry, Amazon). The discount titan reported annual revenue of about $130 billion during fiscal 2015. It represents at least half of total sales volume for many CPG companies, including some of the largest ones.



The Walmart shopping app, which delivers Walmart Pay, has around 20 million users. If most of those users start making the majority of their in-store Walmart purchases via Walmart Pay, then Walmart Pay will become a main rival for current mobile payment leaders Apple Pay, Android Pay and Samsung Pay.



None of those services has gained traction as quickly as expected, making the potential impact of runaway Walmart Pay usage even greater. And if Walmart Pay encourages significant numbers of new users to download the Walmart app, that will magnify its impact even further.



Walmart does not currently accept other forms of digital payment, but has admitted to holding confidential discussions about integrating Walmart Pay with other leading digital payment providers. If the Walmart’s proprietary payment service takes off, then it will have a much stronger negotiating position.



Another possible result of Walmart Pay success would be other Tier I retailers deciding to launch their own proprietary digital payment apps. Target has been widely reported to have such a service under development, and many other chains would likely follow suit.



Consumers have already demonstrated that there are a finite number of apps they will use. A slew of Tier I players would likely imitate Walmart in the event of Walmart Pay success. Only a handful would last. Shoppers are not willing to open a separate payment app for every retailer they visit.



This means that while sustained positive consumer response to Walmart Pay would challenge third-party competitors, it would only have a shot at knocking out the weakest ones. Some observers have credited the mere proposition of Walmart Pay as being the final blow which ended the brief, beta pilot existence of the retailer consortium-backed CurrentC mobile payment app.



Finally, there is the possibility that Walmart Pay will not have any significant impact at all. Walmart has cited some outstanding early usage statistics, but they could prove to be a short-lived blip in consumer activity. While Walmart would not likely suffer any long-term harm, a Walmart Pay fail would put a damper on other proprietary retail digital payment services. It would also reinforce the notion of digital payment as being the domain of a few large tech companies.



Not many retail industry or digital payment players other than Walmart are rooting for Walmart Pay to do well, but their opinions don’t matter much. All that really matters is what consumers think of Walmart Pay, tomorrow as well as today.