Following Walmart’s debut of its in-store mobile payments service, Target is reportedly working on developing its own mobile wallet, according to Reuters.
The report didn’t give many details on how the wallet would work, but it did indicate that Target (TGT) would likely be using barcode scanning technology to allow consumers to pay with the wallet at a terminal. This is the same technology that Walmart and Starbucks both use in their respective wallets.
Walmart’s (WMT) new payment service requires users to upload a credit card number into a mobile wallet. When checking out at the store, the app will create a QR code, or a digital barcode, that can be scanned at the cash register.
It’s not entirely surprising Walmart, and now Target, are choosing to create their own mobile wallets.
Similar to Walmart, Target famously decided not to accept Apple’s mobile payments technology, Apple Pay (AAPL), when it was introduced last fall. Walmart and Target instead joined the Merchant Customer Exchange, a partnership of major store and restaurant chains, with ambitions of creating an Apple Pay rival. But MCX has stumbled and only started testing its service, called CurrentC, in the past few months.
Target would join a long list of companies pushing into in-store mobile payments including Walmart, Apple, Samsung, Google, and PayPal. These companies are clamoring to take a stake in a potentially huge mobile payments market, which is expected to handle $142 billion in transactions by 2019, according to Forrester Research.
Walmart is following the model of Starbucks, which has created one of the more successful mobile payments apps in the past decade, according to Sucharita Mulpuru, an analyst at Forrester Research. Starbucks recently said that mobile payments account for 20% of all the chain’s 9 million weekly in-store transactions, more than double the figure the company reported two years ago.
Another opportunity for Target is to integrate its RED loyalty program into the wallet. Loyalty rewards creates a lot of stickiness in an app, explained Mulpuru, in regard to Walmart’s potential opportunity last week.
When Coins2Day contacted Target for comment, Target made this statement: “Target is committed to MCX, and is excited to be part of the CurrentC pilot in Columbus, Ohio. We continue to explore additional mobile wallet solutions, including Apple Pay, and will ultimately work to provide the best and most sought-after mobile wallet experiences for our guests.”
One source said that Target’s mobile wallet is still very early in development and the company is looking at a number of in-store payments services.
1:09pm EST, 12/18/2015: This story was updated with a statement from Target and an additional source.
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