Target Corporation Hops on the Bandwagon of Mobile Wallets

23 Dec 2015 | Author: | No comments yet »

Report: Target to Launch a Mobile Wallet.

Following Walmart’s debut of its in-store mobile payments service, Target is reportedly working on developing its own mobile wallet, according to Reuters. The report didn’t give many details on how the wallet would work, but it did indicate that Target TGT would likely be using barcode scanning technology to allow consumers to pay with the wallet at a terminal. The move would put the fourth-largest U.S. retailer in direct competition with other payment platforms, including Apple Pay, Android Pay, and Samsung Pay, for example.

What’s interesting about this report is that, like Walmart, Target is also a member of a retailer-backed consortium MCX which is developing a mobile wallet to compete with the likes of Apple Pay, called CurrentC. Retailers like Walmart and Target likely prefer proprietary in-house systems for two reasons: They can save on processing fees for credit card transactions, which stores would otherwise have to absorb, and they gain deeper insight into consumer behavior. That app has not yet launched, but has been criticized for being a clunky solution in comparison with the NFC-based tap-and-pay efforts from Apple, Google and others. That’s certainly believable given that Target has already rolled out a suite of beautifully designed mobile applications that are also innovative from a technical perspective.

For example, Target’s mobile couponing app Cartwheel is a top 10 app on the App Store today, and sees heavy usage from consumers who tap to add items to their savings list then scan a barcode at checkout. The next year should see continued developments in the payments space: On Thursday, Apple and Samsung formally announced they are entering the Chinese market in 2016. These companies are clamoring to take a stake in a potentially huge mobile payments market, which is expected to handle $142 billion in transactions by 2019, according to Forrester Research.

The company’s flagship app also introduced its own in-store item locator, and uses beacon technology to ping consumers about in-store deals, trends and recommendations. Walmart is following the model of Starbucks, which has created one of the more successful mobile payments apps in the past decade, according to Sucharita Mulpuru, an analyst at Forrester Research. Outside of mobile, Target has been open to trialing new means of reaching its customers, whether that’s through on-demand grocery deliveries or curbside pickups – further indicators that the company is not slow to embrace new technology and services. Starbucks recently said that mobile payments account for 20% of all the chain’s 9 million weekly in-store transactions, more than double the figure the company reported two years ago.

That makes it sound like the payments process could actually be integrated within Cartwheel, though the wallet has not actually moved to the point of testing, the articled notes. When Fortune contacted Target for comment, Target made this statement: “Target is committed to MCX, and is excited to be part of the CurrentC pilot in Columbus, Ohio. A spokesperson said that the retailer will “continue to explore additional mobile wallet solutions, and will ultimately work to provide the best and most sought-after mobile wallet experiences for our guests.”

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