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Target launched its long-anticipated mobile wallet for in-store payments on Monday, according to TechCrunch. The product, which will be barcode-based and housed in the existing Target mobile app, is known as Wallet. Two key features distinguish Wallet and could help optimize it for use:
- The wallet is only available to store cardholders. Unlike many other retailer-based wallets, only customers with a Target-branded REDcard credit or debit card are able to pay with Wallet, though gift card support is expected soon. This limits Wallet’s addressable audience to Target cardholders, though it could grow the number of customers with REDcards. For now, it’s marketing the wallet exclusively to an audience that’s already engaged, which may be a smart move — focusing on a captive audience of loyal customers who already shop at Target regularly could build usage and engagement from the get-go.
- That’s especially true because it expands upon existing app functionality. In preparation for Wallet’s launch, earlier this year Target combined its savings-based Cartwheel app — where customers can scan a barcode at the point-of-sale (POS) in order to obtain discounts and offers — with its existing mobile app. That combination makes sense now: Wallet is building in-store mobile payments into that same barcode scan, so that one function gives customers access to discounts and allows them to pay in one action. If customers are already using Cartwheel — and many are, as the app has 40 million downloads and 27 million active shoppers — in-store payments might be a natural next step, especially since Target boasts a four-times increase in speed from Wallet, which could appeal to convenience-hungry customers and ultimately entice usage.
That could give the wallet a running start. Mobile in-store payments remain largely unpopular in the US — just 1% of payments on Black Friday were made using a mobile device — but customers tend to prefer retailer-based wallets, especially for places they shop regularly. Walmart Pay, which is housed in the retail giant’s existing ap, is seeing accelerating adoption and strong engagement, for example. By targeting an already engaged user base, leveraging Cartwheel to make purchasing easier for consumers, and giving incentives like added convenience, Target is taking concrete steps to grow adoption and engagement, making it likely that Wallet will reap those rewards from the start.
But what will be important to watch is whether Wallet can maintain that growth — Target may need to add additional mobile incentives, or open Wallet up to the general population through bank or card partnerships, in order to sustain traction.
Ayoub Aouad, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on retailer mobile wallets that:
- Explains what hurdles universal mobile wallets have faced.
- Details what features retailers have adopted into their mobile wallets that have been successful
- Analyzes the use cases of retailers that have successfully leveraged their mobile wallet offerings to push growth.
- Identifies how universal mobile wallets will eventually slow growth for retailer-based mobile wallets.