There’s Apple Pay, Android Pay, and Samsung Pay. And there are even companies such as Swatch that are designing smartwatches solely around a mobile payment system, and even retailer Wal-Mart is launching its own mobile payment plan, too. And yet, it seems as though there’s room for more, if Target has its say. According to sources familiar with the matter, Target is developing a mobile payment system of its own. Target is moving in this direction by working with credit card companies and intends to use QR code scanners in order to help consumers pay with their smartphones.
While there has been little to no testing of the rumored mobile payment service, a number of consumers will find the news hard to swallow – particularly because, a little over a year ago, Target was the victim of a data breach in which credit card/debit card numbers, names, physical addresses, email addresses, and other information was obtained illegally by way of Wi-Fi networks. Target stores have Starbucks coffee shops located within them, and Starbucks has also been a victim of a data breach. With that said, it stands to reason that consumers would not want to engage in a Target mobile payment service, even if it was legitimate and would outperform the other competing services in the market at the moment.
At the moment, Apple Pay, Samsung Pay, and Android Pay dominate mobile payment services worldwide, with Apple Pay having lots of support in the US with banks such as Wells Fargo, Bank of America, and so on. Samsung Pay has gained partnerships with SunTrust, Chase, Bank of America, etc., and has just started gaining some traction since the mobile payment service was launched in September/October. Samsung isn’t charging merchants for Samsung Pay, which is part of the reason behind its success. There’s been no word on whether Android Pay is charging merchants or not, but we presume Google is charging responsibly in order to remain competitive.
Android Pay, Google’s mobile payment service, has gained traction in Australia, with the search engine giant’s system outranking Apple Pay there. Apple Pay poses problems for Apple’s payment method because it requires merchants to update their card payment terminals to be NFC-compatible (near field communication). Samsung Pay, on the other hand, doesn’t demand NFC and will work with traditional card readers. Android Pay will require NFC as well, meaning that it is stuck in the same rut as Apple Pay. Samsung Pay works in 90% of all retailers, with Android Pay and Apple Pay working in fewer locations.
Target, like Wal-Mart, will likely launch its own store incentives (or gift card incentives or credits) for customers who use its new mobile payment service when it launches, but maybe this is the reason behind it’s unlikely that Wal-Mart or Target’s mobile payment methods will not compete directly with Apple and Samsung. Apple and Samsung, along with Google, have a bigger focus on consumers in mobile, regardless of stores, while Target and Wal-Mart will focus on appealing to their particular customer bases that frequent their stores (irregardless of whether or not these customers are diehard Apple, Samsung, or Android users).
Samsung, Apple, and Android all use some form of tokenization whereby card information is not stored on the device, and Target and Wal-Mart will need to use secure data gathering and processing in order to prevent a data breach. At the same time, however, it’s understandable that few would want to take a chance on a mobile payment system with Target.