Exclusive: Target in initial development of its own mobile wallet - sources
Target Corp is in early stages of developing its own mobile wallet, three people familiar with the matter said, signaling a potential threat to new entrants like Apple Pay a week after Wal-Mart Stores Inc announced its own plans.
Context & Ripple Effects
This exclusive lands one week after Walmart unveiled Walmart Pay for select US stores ahead of a first-half-2016 nationwide rollout, making Target the second mass-market retailer this month to signal it wants payment running through its own app rather than a tech platform's. The sourcing held up: two years later Target shipped an in-app payments system with the debut of its Wallet feature on iOS and Android.
The story matters because it marks the moment big-box retail treated wallets as a strategic asset — checkout data, loyalty integration, and interchange economics all sit inside that decision — and because the eventual arc runs full circle, with Walmart ultimately embracing contactless Tap to Pay supporting Apple Pay and Google Pay by end of 2026 after years of resisting it.
First-order effects
- Target joins Walmart in keeping card-present payments inside its own app, directly competing with Apple Pay and other new entrants for transactions at its own registers.
- Apple Pay loses ground in the two biggest US discount chains before it scales there, since neither retailer plans to accept it at checkout.
Second-order effects
- Walmart hedges rather than doubles down alone, entering talks with several mobile wallet firms and adding Chase Pay as a Walmart Pay option — evidence retailer-owned wallets were already seeking bank partnerships to broaden acceptance.
- Payment networks and handset-based wallets face a pricing and acceptance squeeze: if the largest retailers route volume through closed apps, wallet entrants must win shoppers elsewhere or negotiate their way back in.
Third-order effects
- The pattern points toward a decade-long contest between closed retailer wallets and open tap-to-pay standards — one that, per Walmart's 2026 reversal toward Apple Pay-compatible Tap to Pay, ended with interoperable standards reclaiming the checkout as consumer habit formation proved decisive.
- If retailer-owned wallets had held scale, payment data and loyalty would have consolidated inside merchant apps, shifting bargaining power over interchange and customer relationships from banks and device makers to retailers.
The trend: Big-box retailers first built proprietary wallets to own checkout data and fend off Apple Pay, then gradually conceded to interoperable tap-to-pay standards once consumer defaults hardened around them.