Internet Retailer talks with Eckert about mobile payments, apps and the future of Walmart Pay.

Wal-Mart Stores Inc. doesn’t see Walmart Pay as a mobile payment option. It’s a way to improve checkout, says Daniel Eckert, senior vice president of Wal-Mart Services.

Wal-Mart, No. 4 in the Internet Retailer 2016 Top 500 Guide, finished deploying its in-store payment feature to all 4,600 of its U.S. stores at the end of June. Walmart Pay is available to shoppers with its app while in a store. About 20 million consumers actively use the Wal-Mart app, meaning they have opened it at least once within the last 30 days, Eckert says.

The payment button allows shoppers to pay anytime during checkout. To pay, the shopper holds her smartphone up to the point-of-sale terminal for it to scan an in-app QR code. When the clerk finishes scanning the items, the shopper hits confirm on the payment total and then the e-receipt is delivered and stored in app. This is the same process for self-checkout.

The retailer developed Walmart Pay in-house in nine months and finished the chain-wide deployment in six months. Now that the feature is available to all U.S. shoppers, the retailer is alerting its shoppers of it via emails, in-app notifications and in-store via signage.

Internet Retailer sat down with Eckert this week to find more about the retailing giant’s strategy with its latest mobile app feature. The interview is edited for clarity.

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Why did Walmart decide to launch Walmart Pay?

The journey to Walmart Pay began 15 months ago, so not too far back. It was part of a broader strategy we’ve been working on that looks at the size, strength and assets we can bring to bear to improve the overall shopping experience. One of the first opportunities we thought could be a great opportunity to improve was at checkout. And so for us, Walmart Pay was not a payment capability purely for payment sake.

How often do consumers use Walmart’s apps?

We have about 20 million active users of the Wal-Mart app between Android and iOS, so it’s used often and frequently. And even one of the things we saw early on, even years ago, was that our customers are fairly digitally enabled. 75% of our customers have a smartphone and of that, 50% of those smartphone users use their mobile apps to help shopping while in store.

So we already saw that they were engaging in these types of behaviors. So one of the things we did early on with the Wal-Mart app is paired geofencing services to all of our stores, all 4,000-plus of our stores, so when you have geolocation turned on and you trip that fence, the app actually turns into in-store mode, and brings a Swiss army knife worth of capabilities to heads up display for customers to use. Everything from to scanning items to finding store location of items to now Walmart Pay. We’re seeing many millions of customers not only engage in a mobile app for buying, they’re also using it as a remote control in their pocket to improve their overall shopping experience. 

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Tell me more about these in-store features.

For the bar code scanning, you scan an item and it will tell you the price, it will tell you the availability, it will tell you if it’s available online, and for thousands of our items we’ll get you within a 4-square-feet section of our store. Not a small feat when you think about the scale of Wal-Mart having 4,637 stores having them mapped. So if you are looking for barbecue sauce, we can get you to within a 4-square-foot section in that store to find it. Not only the aisle, it will also get you to the shelf.

How many customers use in-store mode?

I don’t think we track inside the app with analytical precision how many in-store modes were flipped. But 70% of our app users have geofencing turned on. So either all 70% or some subset of it is actively using in-store mode.

How has use of Walmart Pay gone?

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We’ve been really encouraged by the results. Here are some statistics we’ve seen so far: Four out of five shoppers have given it an in-app rating of four stars or more. 89% of our transactions come from repeat users. We actually quoted this in early July and it was 87.5% and we’ve seen it tick up since we’ve been chain-wide. So that’s really encouraging news to see the health of the business come from repeat users.

Why are there no coupons or incentives to use Walmart Pay?

What we’re finding is that our customers value time saved almost as much as the money they’ve saved in our stores. The research we did with Walmart Pay found that if you just save shoppers some time, that’s benefit enough for them to see the value to want to use it.

How much faster is it?

We haven’t concluded our official timing studies on self-checkouts and belted registers, but the feedback is very encouraging in that, anecdotally or either in-app feedback or email, is this felt fast. Compared to some of the alternatives out there, it definitely allows for that quicker and more seamless checkout than you’d expect.

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Speaking of alternatives, how does this compare to other mobile payment options?

For us, when we looked at developing Walmart Pay, it certainly was in the consideration set to ask, ‘What else is out there that could help our shopping experience?’ What we found was that all of the things that were out there that could deliver a payment experience that was better than EMV (EMV is the new standard for debit and credit card payments in stores that uses cards with microprocessor chips rather than the decades-old magnetic stripe technology) or other opportunities, they had limitations on their own. For example, some of the wallets that are out there only work on the next-generation hardware (mobile devices that have features not available on older smartphone models, such as Bluetooth Low Energy) that has just been produced. Some of them can only work on a particular operating system (such as Apple Pay only works on iPhones). Some of them only work with gift cards. So there are different types of payment types but you can’t use all the payment types in your purse or wallet. All of those had their limitations, so for a retailer that serves literally America every single week, we needed to make sure access and choice were paramount.

When we scanned the universe of opportunity, we realized this is something we would have to build ourselves. So Walmart Pay is the first retail payment application that accepts most forms of payments, that’s credit, debit, gift card, the Wal-Mart shopping card and the Wal-Mart credit card. It works on any device that has Android or iOS, no matter the version, and can work for any one of our customers that have a smartphone, which is 75% of our customers.

Do your point-of-sale terminals accept near field communication payments? (Which is the technology that enables mobile payment options Apple Pay and Android Pay to work.)

 We do not have NFC acceptance at this time.

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Are you thinking about it?

I can never say never but right now we are really focused on the best shopping experience we can, and we feel right now, Walmart Pay is that experience. And when you think about it really, when you are inviting different ways to pay, you have to be thoughtful about not only the customer experience but also what the associate experience will be. So when you have a consistent way when a customer and an associate can engage in an transaction and even more importantly when a transaction may have failed for some reason, it is important to have one that you have the confidence you can control and understand. 

Wal-Mart previously backed CurrentC. (A mobile wallet that was in development by the Merchant Customer Exchange, a consortium of retailers including Wal-Mart Stores Inc. and Target Corp.)  What’s going on with that?

We were an active pilot in Columbus. MCX is an independent company; it’s run by an independent chief executive and board. Their decision to sunset CurrentC was based on their learnings.

What did you learn from that pilot?

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We learned that when you’re building an acceptance scheme that spans multiple retailers, it can be difficult to coordinate all of those things. How does the acceptance standard work? How do customers gain awareness that the acceptance mark is now enabled? What’s the user experience across retail? Those are much more difficult payments problems to solve then really focusing on what we wanted to do, which was to improve our customer shopping experience. And one way to do that is to look at checkout and be single minded about our experience for our customers, as opposed to trying to boil the ocean and try to solve a payments issue, or coordination issue across multiple retailers.

What’s next for Walmart Pay?

Once you have Walmart Pay, once you have someone who has downloaded the app and established a payment credential with a profile, you can do some pretty magical things in other areas of the store. For example, imagine a day where you are a pharmacy customer of Wal-Mart and you have refills. You can open the Wal-Mart app while at home, click two buttons and that refill is sent to your Wal-Mart pharmacy, it comes back tells you when it’s ready, you pay ahead, sign your HIPPA compliance forms–all in the app–and all you have to do is walk into the store, scan the app, and the pharmacist will hand you your meds. That’s the type of experiences you can create when you build this ecosystem around payment and profile to improve a shopping experience.

Is that pharmacy example now live?

Stay tuned. We’ve got a lot going on. There is a development roadmap as long as my arm.

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