Wal-Mart Stores launched its own mobile payment service 'Walmart Pay' on Thursday, potentially dealing a sharp blow to the ambitions of CurrentC, a beta-stage mobile wallet the company had been co-developing with a consortium of retailers.
Walmart Pay is a free service that will be available on Apple and Android devices and allow payments with any major credit, debit, pre-paid or Walmart gift cards, the company said.
The company said Walmart Pay was developed independently, but it continues to remain associated with CurrentC as a possible mobile wallet addition to Walmart Pay.
CurrentC - whose developers included Target and Best Buy - was likely to prove strong competition to Apple's Apple Pay.
While Wal-Mart doesn't accept Apple Pay, Target and Best Buy have started supporting the service.
Walmart Pay requires customers to choose the payment option within the retailer's mobile app at a checkout counter, activate their phone camera and scan the code displayed at the register after which an e-receipt will be sent to the app.
Near-field communication (NFC) payment services such as Apple Pay require customers to place their phones near a store's NFC-enabled payment terminal and scan their fingerprint to make a payment.
Although Apple now allows users to store their loyalty cards in the Apple Wallet app, Apple Pay does not have a "strong value proposition" as it cannot include retailers' loyalty programs, research firm Gartner analyst Penny Gillespie said.
Walmart Pay was introduced in select US stores and is expected to be available nationwide by the first half of 2016.
Gillespie sees the Wal-Mart service as a "logical progression" for the retailer.
"(Walmart Pay) fits the trend of scale players in the payments ecosystem looking to control mobile payments by leveraging their content and high traffic apps," JP Morgan analysts wrote in a research note.
While the mobile payment market has got more crowded with big players such as Alphabet's Android Pay and Samsung Electronic's Samsung Pay, adoption by customers remains sluggish.
Wal-Mart said the service will also allow adding other payment options such as mobile wallets in the future.
The company was in talks with mobile wallet developers, Daniel Eckert, senior vice president of services for Walmart US, said on a conference call on Wednesday. He did not name the companies.
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