Target is planning to enter the mobile wallet space, according to a Reuters report.
Multiple sources told the news service that the retailer is readying an app that would allow customers to pay via mobile device. That would position Target Corp. as a competitor to Apple, Google and Samsung, who each have their own mobile wallet solutions (all similarly named – Apple Pay, Android Pay and Samsung Pay), as well as start-ups like Square and PayPal.
The sources were not yet sure when Target would launch the app, although it could be early 2016.
Target is already partnering with other retailers, including Walmart, to develop mobile wallet service CurrentC. It’s unclear what their own proprietary service would mean for the effort, but Walmart recently announced that it was developing its own mobile wallet called – surprisingly – Walmart Pay.
That service began testing in Arkansas last week.
Alex Scherer of The Motley Fool pointed to an important factor motivating the Bentonville, Ark.-based retailer: credit card fees.
“They care very deeply about how much they pay every time you swipe a card and use a payment system,” Scherer said last week. “So creating this app allows them to have control of the customer data and, eventually, if it’s successful, to promote more heavy usage of debit cards, Walmart gift cards, and anything other than credit cards, which they pay very steep fees for.”
That logic could be pushing Target in a similar direction with its own mobile payment system. It currently does not accept the other wallet apps in its stores but would likely work with credit card companies to help incentivize customer adoption of its own service, which could minimize costs compared to current payment options it has no control over.
A spokesman did not confirm the report, but told TechCrunch that the company will “continue to explore additional mobile wallet solutions
According to the Reuters report, Target would likely include the wallet service with its current mobile application.