Here’s Why Walmart Is Increasing Focus On Mobile Payments

WalMart (NYSE:WMT)is beefing up its mobile payment app “Walmart Pay”.  The company recently partnered with JP Morgan Chase & Co (NYSE:JPM), which will become the first third party digital wallet on its website. The company is in talks with several other mobile wallet companies to increase the payment options on its Walmart Pay app. Walmart Pay was launched in December last year and, while the company has not released usage numbers around this app, company management revealed that 90% of transactions on the app involve customers using the service nearly three to four times in a month. As millennials enter their high spending years, Walmart is looking at ways to attract this young set of consumers to its stores. Walmart Pay is part of the Walmart app and as as such is key to its effort to take on e-commerce players.  Battling on the convenience front, Walmart is looking to provide payment convenience to users who already use its app in store. An integrated shopping and payment app can attract buyers and with more payment options on Walmart Pay it can appeal to a larger section of consumers. Walmart’s technology initiatives are aimed at younger buyers, attempting to move them away from online shopping to its stores by offering convenient shopping experiences.

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Adoption Of Walmart Pay Growing Rapidly, Recommended By Several Users

Walmart’s goal with Walmart Pay was to make the checkout process frictionless, saving time for busy shoppers and ease the offline shopping experience. As it faces stiff competition from online players (especially Amazon), the company is looking to attract younger shoppers for whom convenience is a critical factor for every day shopping. These young shoppers (millennials) will soon form a sizeable portion of the total consumer population and Walmart is looking at ways to attract them to its stores. The company already has more than 20 million monthly active users of Walmart.com and these users can use Walmart Pay for a faster checkout process. Consumers using the Walmart app (which is used by several shoppers in stores) in any of its 4,600 stores  can also use Walmart Pay through the same app. The company is witnessing strong adoption of this mobile payment feature and nearly 82% of its users recommend this option. By adding more mobile wallets to Walmart Pay, the company is looking at increasing adoption and faster growth of its mobile payment feature. In a 2015 study by British shopper marketing agency Savvy, convenience emerged as the main driver for the increase in online grocery shopping in the U.S. As consumers look to save time on household errands to devote more time for their families or hobbies, online shopping is an easy answer. However, Walmart is now looking to provide a similar convenience while shopping for products at its stores, with groceries accounting for more than 50% of its revenues. Mobile payments is one such convenience which reduces the checkout time and makes it easier for the consumers to pick up groceries when they have stepped out just with their smartphones.

We believe that, as Walmart works towards taking on e-commerce players, the move to strengthen its mobile payments will add to consumer convenience and help in attracting millennials to its stores.

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