As omnichannel developments narrow the gap between shopping at stores and e-commerce, retailers are increasingly envisioning a future where in-store, online, and mobile consumers pay with the same method. Mobile payments more than doubled in 2015 to nearly $9 billion, and could surpass $210 billion by the end of the decade; by 2018, Gartner predicts that half of consumers in mature markets will use smartphones or wearables for mobile payments.

However, which method they will be using for those payments remains undecided. Challenging the presumed dominance of Apple Pay, Android Pay, and Samsung Pay, Walmart and Target have developed their own mobile transaction systems. L2’s Insight Report: Mobile Payments makes the case that app-based payment schemes such as Walmart’s could be the ones to catch on.

Like Walmart, which has refused to adopt mobile payment platforms such as Apple Pay, most retailers have not invested in these formats. Only 23% of brands in L2’s Digital IQ Index: Big Box accept Apple Pay at the register and only 8% offer it within a brand app. Similarly, only 16% have partnered with Android Pay for in-store use, and none allow it in their brand apps. While Samsung Pay has the advantage of working with existing technology, adoption is curbed because the payment system is only available on the latest Samsung devices.

Apple Pay integration

Instead, retailers are building the ability to make mobile payments into their brand apps. Nearly half of Index brands offer general commerce functionality in their apps, while only 3% offer commerce via a third party.

Mobile app commerce functionality

For example, Starbucks has used its app to become a leader in mobile payments. Almost one in five in-store transactions are completed through the brand’s mobile app, which – unlike, for instance, Apple Pay– can be used on any device. Walmart is hoping to emulate that success with Walmart Pay, an add-on feature to the Walmart app scheduled to roll out nationwide by June. Though limited to use at the retailer’s own stores, Walmart Pay can tap into a huge user base: the Walmart app’s more than 22 million active users.




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