Why is This Gargantuan New Player Stepping Up to the Mobile Payment Space?

TL;DR

Walmart is launching its own mobile payment system, focusing on reducing fees and promoting the use of debit cards.

Transcript

Chris Hill: The mobile payment industry has been one of the more interesting industries to watch over the last couple years, when you just look at the major players, you look at the startups like Square, Xoom, PayPal, etc. And now, a little company by the name of Walmart has entered the space. Walmart is launching its own mobile payment system. The... Read More

Key Insights

• 💳 Walmart's main motivation for launching its own mobile payment system is cost reduction and promoting the use of debit cards over credit cards.
• 😀 The app's availability on both Apple and Android phones reflects Walmart's focus on fees rather than competing directly with Apple Pay.
• 🥺 Walmart's entry may lead to the downfall of the MCX network, as other merchants may shift towards partnerships with established mobile payment platforms.
• 🎁 The launch of the app will provide Walmart with control over customer data and potentially increase usage of Walmart gift cards and other payment options.
• 🚗 While Walmart's move is significant in the mobile payment industry, it may not have a major impact on Apple's sales or customer loyalty.
• 🚗 The future success of Walmart's mobile payment system will depend on customer adoption and whether the company can overcome potential challenges.
• 🛃 Walmart's decision to develop its own system instead of acquiring existing players like Square showcases their commitment to creating a custom solution.

Questions & Answers

Q: How does Walmart's mobile payment system differ from Apple Pay and Google Pay?

While some may see the competition between Walmart and Apple Pay or Google Pay, the real motive behind Walmart's move is reducing fees and promoting the use of debit cards. They prioritize cost-saving over competing with other mobile payment platforms.

Q: Will Walmart's app affect Apple's sales or customer loyalty?

Although some headlines may raise this concern, Walmart's main focus is not on challenging Apple or impacting their customer base. Walmart aims to significantly lower payment processing fees by encouraging customers to use their own payment system instead of credit cards.

Q: How does Walmart benefit from driving the use of debit cards?

Walmart pays significantly less in processing fees if customers use debit cards through the Automated Clearing House network instead of Visa or MasterCard. By promoting the use of debit cards, they aim to reduce expenses and increase profits.

Q: What are the implications of Walmart launching its own app for the MCX network?

Walmart's entry into the mobile payment space with its proprietary system is likely to lead to the demise of the MCX network, which aimed to offer an alternative to Apple Pay and Google Pay. Other merchants are expected to drop the MCX system and form stronger partnerships with Apple and Android.

Summary & Key Takeaways

• Walmart is launching its own mobile payment system, starting with a test run in Arkansas and expanding to the rest of the United States over the next six to nine months.

• The app will be available on both Apple iPhones and Android systems.

• Walmart's motivation behind creating the app is to have control over customer data and reduce fees by encouraging the use of debit cards instead of credit cards.