Walmart Pay Joins the Mobile Payments Fray

The service will be offered in select stores in December and is expected to roll out across the United States by the first half of 2016.

Walmart, Walmart app, Walmart Pay, mobile payments, Chase Pay, Android Pay, Apple Pay, Samsung Pay

Walmart is the latest big name to enter the still-developing mobile payments industry. The retail giant launched Walmart Pay service, which it expects to roll out across the United States by the middle of 2016.

The world's largest retailer announced Walmart Pay Dec. 10 as a fast and secure way for shoppers to make purchases in the company's stores using any Android smartphone or Apple iPhone at any checkout lane using almost any payment card.

The new free service works through the company's existing Walmart mobile app, which is already being used by about 22 million customers each month, according to the company. Walmart Pay is being introduced immediately in select stores around the United States and will be expanded after the holidays, according to the company.

Using the Walmart app, customers will be able to pay for purchases through Walmart Pay using any major credit, debit, prepaid or Walmart gift card, the company stated.

"The simplicity and ease of Walmart Pay comes not only from how it works, but also in how it's been built," Daniel Eckert, senior vice president of services for Walmart U.S., said in a statement. "We made a strategic decision to design Walmart Pay to work with almost any smartphone and accept almost any payment type—even allowing for the integration of other mobile wallets in the future. The result is an innovation that will make the ease of mobile payments a reality for millions of Americans."

To use Walmart Pay, customers will have to open the Walmart app on their phones, chose Walmart Pay and use the camera on their device to scan a code displayed at the register during the checkout process to connect to the service. After a store clerk scans and bags the items being purchased, the transaction will be processed automatically and a receipt will be emailed to the customer through the Walmart app, where it can be viewed anytime.

The existing Walmart app already allows customers to pick up an online order at a Walmart store, refill a pharmacy prescription and find an item's location inside a store.

The mobile payments platform wars have been making plenty of headlines in recent months as more and more companies are adding their own systems to the marketplace. In November, LG Electronics announced the development of its own payment service to take on similar services from competitors, including Apple Pay, Android Pay, Chase Pay and Samsung Pay.

In October, JP Morgan Chase announced Chase Pay with a planned mid-2016 launch; Samsung launched Samsung Pay in the United States on Sept. 28. Apple Pay, which has been available since October 2014, lets Apple users make purchases and payments using their late-model iPhones, iPads or Apple Watch devices.

Patrick Moorhead, principal analyst at Moor Insights & Strategy, told eWEEK in a statement that Walmart's mobile payments system may not be as good as systems from other vendors because it relies on a smartphone's camera, rather than on near-field communication (NFC) or other methods to enable transactions.

"Compared to something like Apple Pay, Walmart Pay is a chore and less reliable," wrote Moorhead. In addition, customers have to wake up and activate their smartphones, find the Walmart app and take a photo of a code at the cash register just to get the transaction started before it is ever sent off to Walmart for electronic processing via the phone, he said.

"Given the variability in smartphones, camera quality, lens cleanliness, 3G/4G signal strength, and WiFi-call 'juggling,' I cannot imagine this being a reliable experience," wrote Moorhead. "What if cell coverage isn't good? What if I haven't logged into Walmart WiFi and I can't get a signal? What if my camera quality is poor? What if my lens is dirty?"

In comparison, Apple Pay and Samsung Pay only require shoppers to put their phone next to an NFC terminal and then touch a biometric lock button to complete a transaction, wrote Moorhead. "It removes all variability in 3G/4G/WiFi, camera quality, lens cleanliness, and is immediate."

The service does have a chance for success if the company "tie[s] it to incentives and if Walmart can iron out the expected consumer challenges with their implementation," he wrote.

Another analyst, Jan Dawson of Jackdaw Research, told eWEEK in an email reply to an inquiry that the Walmart Pay system isn't as graceful as it could be.

"If anyone can make a proprietary mobile wallet work, it's the largest retailer in the world," wrote Dawson. "But as with so many other solutions, this one looks really clunky compared to device-based systems like Apple Pay or Android Pay. It's almost inevitable that Walmart will eventually have to embrace those other payment methods—they're going to become de facto standards over the next couple of years, and they'll become even more attractive as the cumbersome new chip-based card payment systems proliferate."

Instead of making Walmart Pay as easy to use as competing systems, "this is Walmart putting its own needs above those of its customers, and I think that's going to come back to bite them."