Walmart Will Launch Its Own Mobile Payments Service

Mega-chain Walmart announced today that it plans to offer mobile payments to its shoppers. Called Walmart Pay, the service will launch next year as a feature in Walmart’s existing smartphone app. The company accounts for about 10 percent of retail sales in the U.S., so Walmart Pay can potentially pose a challenge to Apple Pay and Android Pay if enough customers start using it.

In its current iteration, however, Walmart Pay sounds like a hassle. To use the service, which will be available in the first half of 2016, customers need to open the Walmart app and present a QR code to their cashier to check out with the payment information already entered in their account. Walmart claims that its mobile app currently has about 22 million users.

Using an in-app QR code is arguably so cumbersome that many shoppers will likely prefer to just take out their debit or credit cards and check out the old-fashioned way. Walmart has also never enabled the NFC readers needed for Apple Pay. One of the reasons for this is because Walmart has teamed up with other retailers like Kmart, Best Buy, and 7-Eleven to make a mobile payment app called CurrentC.

CurrentC hasn’t officially launched yet, but its app has already been criticized for being hard to use and it may not be ready for consumers until next year.

Though their success is still far from certain, retailers are eager to create their own mobile payment systems because it will allow them to beef up their margins by avoiding credit card processing fees. Even though Apple doesn’t charge merchants fees for using Apple Pay, (it takes money from banks instead), the system uses credit cards, which means merchants still have to pay fees. As a result, retail companies, most of which operate on extremely tight margins, want to find a way that will let them process payments directly from checking accounts or their own store credit cards.

As the Wall Street Journal notes, the company appears to have taken a step back from CurrentC by launching Walmart Pay, but Daniel Eckert, Walmart’s U.S. head of services, said Walmart still plans to work with the joint venture.