Target is said to be looking into getting its feet wet with developing its own mobile wallet, but it’s not diving in head first — just yet.
Target spokesman Eddie Baeb declined to comment on the speculation, which was first reported by Reuters. Instead, he emphasized that Target was committed to the Merchant Customer Exchange, or MCX, “and is excited to be part of the CurrentC pilot in Columbus, Ohio.” The MCX is a joint effort among U.S. retailers including Target, Wal-Mart, CVS Health, Best Buy and more, unveiled in 2012. The merchant-owned mobile payment system is called CurrentC, and uses a QR code to make the transaction.
The timeline of any future possible proprietary mobile wallet from Target has not been determined, and is not expected in the very near future.
“We continue to explore additional mobile wallet solutions, including Apple Pay,” Baeb said. “We will ultimately work to provide the best and most sought-after mobile wallet experiences for our guests.”
Wal-Mart just revealed “Wal-Mart Pay,” which is a payment system available through its mobile app. According to Wal-Mart’s Danit Marquardt, this option just adds on the ability to seamlessly pay using the retailer’s existing app, and makes the option of mobile payment more accessible to its customers by working with any smartphone using iTunes or Google Play, and allowing it to work with any credit, debit or Wal-Mart gift card. In other words, the incentive in creating a propriety payment system is that it would open it up to more customers — and encourage use of the Wal-Mart app, which also lets customers check in to pick up online payments, identify a product location on a shelf or make a wishlist or registry.
The customers are already using the mobile app, Marquardt said, and this new capability just takes it through the payment process. No credit card information is stored in the app; rather, it’s stored separately in a data center.
For its part, Target is known to be an early adopter of mobile innovations. Its app recently incorporated intuitive “quick actions” using iPhones with 3-D touch, a new feature that was introduced by Apple in September. The app lets customers, for example, quickly scan a bar code to see prices and reviews while in the store, using Apple’s new “peek and pop” feature.
According to a February report from Forrester Research, mobile wallets enable marketers to extend the brand promise, improve conversion rates and drive traffic and sales. “In the next few years,” the report stated, “third-party players like Apple or PayPal are best placed to emerge from the mobile wallet wars and morph into rich marketing platforms, offering reach and the opportunity for other brands to borrow mobile moments to better serve their customers.”
Despite increasing options for paying using a mobile device, like a smartphone or smartwatch, customer adoption still seems fairly low. According to Mark Willis, head of technology and innovation at consultancy firm Stored Value Solutions, about 2 percent of Americans have used a phone to make payments, as reported in a recent WWD story. Willis said that part of the reason for the reluctance to move past credit cards are their security and ease of use.