The release of Walmart Pay, Walmart’s new mobile payment service, on May 16th came as something of a shock to the retail industry. Up until then, Walmart had been working with other major retailers in the US - under the umbrella organization MCX - to create CurrentC, an alternative mobile payment service that was supposed to enable retailers to avoid credit cards fees and to have direct access to their customers’ shopping data. A number of news sources have documented the drama behind Walmart’s decision to go solo and analyzed the problems leading up to CurrentC’s apparent demise. Allen Weinberg, a partner at Glenbrook Partners, a payment strategy consulting firm based in San Francisco, CA., cautioned Tradestreaming that it's premature to mourn MCX or CurrentC, given that Walmart has not formally abandoned the initiative. Nevertheless, with MCX declaring its intention to focus on bank deals, it seems likely that many other retailers and shops will jump on the mobile payment service bandwagon by developing their own offerings. Below, we examine how the proliferation of mobile payment services could impact the entire retail industry.
The GoodAs customized mobile payment systems could become the norm at various retailers, consumers are unlikely to have the patience, inclination, or even phone storage space to download each and every mobile payment app. This is an opportunity for retailers to strengthen their brands and their client bases by building on their existing forms of what Paul Kemp-Robertson, cofounder and editorial director of Contagious Communications, calls ‘branded currency’. In a highly entertaining 2013 TED Talk, Kemp-Robertson posits that
“brands literally stand or fall on their reputations. And if you think about it, reputation has now become a currency. You know, reputations are built on trust, consistency, transparency. So if you've actually decided that you trust a brand, you want a relationship, you want to engage with the brand, you're already kind of participating in lots of new forms of currency.”When asked how mobile payment services will affect already existing forms of branded currency, Kemp-Robertson replied: "The trajectory of the mobile wallet trend is only going to get steeper as mass adoption starts to kick in," he wrote Tradestreaming via email. "The brands that will benefit the most are those who move beyond mere convenience and offer tangible rewards and utility in exchange for people’s sustained loyalty. That’s why Walmart has ring-fenced its Pay system, presumably as a way of locking customers into its retail ecosystem. In other words: ‘Stay loyal and reap some exclusive, premium perks.’"