Several major retailers, including Wal-Mart Stores and Target, announced yesterday that they are teaming up to offer mobile payment options that let shoppers pay for their merchandise with their smartphones. According to the Reuters news service, the retailers involved account for about $1 trillion in sales annually.
“E-wallet” apps have been available for a while, but the Merchant Customer Exchange, as it will be known, is the first major retailer-led initiative to go head-to-head with systems managed by banks, credit card processors and online services.
It will be interesting to see how this plays out. Most major retailers, especially department stores, used to offer proprietary store charge cards that encouraged customers’ loyalty by making it easier to shop without carrying a lot of cash. The major credit card processors (Mastercard, Visa and American Express) eventually made the store cards obsolete. It was a lot easier to carry one card that was accepted almost everywhere than to carry a whole wallet full of single-store cards.
Of course, with e-wallet apps, there is nothing to carry; the payment functions resides on your smart phone so you can carry as many or as few as you would like. But the retailers will still rely on traditional financial institutions to provide the backbone of the system. Details were not announced on Wednesday, but a spokesperson for the group said they were more concerned with getting it right the first time than rushing a system to market.
Your thoughts? Are you using mobile payment options now, or will you do so in the future?
NOTE: Wal-Mart and Target are BBB Accredited Businesses.