Wal-Mart, Target Sharpen Focus on Mobile Payments System

March 7th, 2012 by Trefis Team
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Retailers such as Wal-Mart (NYSE:WMT), Target (NYSE:TGT) and others are working together on developing a more advanced mobile payment system. According to reports, they are working on a similar technology that is presently employed by Google Wallet and ISIS. The near field communication technology enables users to make secure payments by simply tapping the phone on any Pay-Pass-enabled terminal at checkout. Target asserted that it is exploring potential solutions to deliver the fastest and most secure mobile-payment experience possible for its customers. ((Walmart, Target to Compete with Isis, Google Wallet, WebProNews))

Google (NASDAQ:GOOG) and ISIS are new entrants in this niche segment within the growing mobile payments industry. Google launched the application on September 19, 2011, whereas ISIS, a joint venture between AT&T, T-Mobile and Verizon Wireless, plans to offer its services from mid-2012.

With growing technological advancements, smartphones have become an integral part of our lives. According to Nielsen, approximately 66% of Americans in the 24-35 age group own a smartphone. Mobiles are playing an increasingly important role in helping customers with their purchase decisions. According to a research by the Pew American & Internet Life Project, approximately 52% of adult cell phone owners use their devices while at a store to get help with purchasing decisions. [1]

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According to estimates, the mobile payments industry is expected to double or triple in next few years, potentially reaching $670 billion transactions by 2015. ((Walmart, Target to Compete with Isis, Google Wallet, WebProNews))

We believe this new technology within the mobile payments industry has huge growth potential. This is the right time to enter this emerging market within this industry as it is still in a nascent stage. Retailers like Wal-Mart and Target could leverage their customer network, wider reach and existing business model to increase adoption rates for their future mobile payments platform.

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Notes:
  1. Mobile Commerce Statistics, Digby [↩]