Retailer Target Developing Mobile Wallet Payments System
Target is reported to be joining the ranks of retailers who are shunning Apple Pay for their own home-grown mobile payments system. Citing “people familiar with the matter,” Reuters reports the the big-box retailer is in the early stages of developing its own mobile wallet.
The fourth-largest U.S. retailer has not committed to launch the product, which would allow customers to pay for goods using an app on their mobile phones. The mobile wallet could launch as early as next year, but it is too early to predict, two of the sources said.
The report says Target’s team is in favor of avoiding NFC-based contactless payments systems such as Apple Pay and Android Pay, instead leaning toward using QR code scanning technology to communicate with payment terminals. (It sounds similar to a system Walmart is currently testing in selected stores.) No in-store testing of the proposed Target system has yet taken place, say sources.
Target’s move, and the similar decision by Walmart cast doubt on the viability of a plan forged by a number of retailers, which included Target and Walmart, to create a new mobile wallet service called CurrentC.
Target spokesman Eddie Baeb said the retailer is still an active member of the Merchant Customer Exchange that is developing CurrentC but it is also exploring additional mobile wallet solutions. He declined to comment on whether Target was developing its own mobile payment service.
Although mobile wallet apps have struggled to find acceptance with consumers, they are attractive to retailers, who are searching for a way to reduce the fees they pay to credit and debit card companies, while also gaining more access to personal information about their customers. While Target does not accept Apple Pay in-store, it does allow its customers to use the payments service for purchases via its mobile app.
Reuters sources says Target is planning to integrate the wallet functionality into its current mobile app, and does not intend to make use of NFC technology, leaning instead toward using QR code technology, requiring customers to scan a code at the payment terminal.