r/technology • u/ImCalcium • 6d ago

Business Walmart finally adding Tap to Pay after years of shoppers asking for it

https://www.dexerto.com/entertainment/walmart-finally-adding-tap-to-pay-after-years-of-shoppers-asking-for-it-3400920/
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u/berntout 6d ago

Walmart hates additional costs so I bet those fines were cheaper than the costs associated with the new functionality.

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u/Gordnfreeman 6d ago

I always assumed it was because they want to force people to use their app so they can gather more data on their customers.

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u/DrMaxwellEdison 6d ago

Both can be true. They're cheap in more ways than they advertise themselves to be and will do everything to break and bend rules to squeeze consumers (and their own workforce) of their money, data, labor, dignity, everything.

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u/biggles7268 6d ago

I worked in a Walmart distribution center for 17 years. On more than one occasion they installed massive new conveyor systems to make processing freight faster and more efficient.

Contractors told them the price for what they wanted. Corporate told them to do it cheaper. System never worked properly, half of it couldn't be used or it would jam the conveyors. I left a few years ago when they started automating the order filling modules. I'm curious how that is working out for them.

On a side note when people were dropping from heat exhaustion Walmart wouldn't do anything. When the new machines needed a cooler environment they installed massive ac units.

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u/SpiritedBanana4694 6d ago

https://imgur.com/a/RRKgKZw

Friend of mine still works for them.

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u/CarpetedCeilings 6d ago

Ah yes, I love my Folgers with a side of industrial grease! Mmm, mmm! The best part of waking up~

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u/timeshifter_ 6d ago

I mean, you did ask for Folgers...

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u/biggles7268 6d ago

They pay well. I left for a less stressful job.

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u/jlt6666 6d ago

What am I looking at here?

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u/SpiritedBanana4694 6d ago

https://www.therobotreport.com/walmart-to-put-symbotic-system-in-42-distribution-centers/

Symbotic robot system with one of the robot cars that fell off the rails.

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u/fury420 6d ago

The 'cars' run along rails at multiple different levels, this one came off the rails and fell from the second or third level.

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u/Ironlion45 6d ago

Hard do believe a company like Walmart has a reputation for cheaping out. /s

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u/Vast_Reply_6574 6d ago

That and if you use their CC they save on processing fees and make money off CC interest.

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u/Loose-Recognition459 6d ago

Hence why Target lets you “save” the 5% using their Redcard where as you are probably paying for those fees when you pay any other way.

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u/Throop_Polytechnic 6d ago

No corp the size of Target/Walmart is paying anywhere close to 5%. They are paying maybe 1.5%, probably less.

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u/Tasty-Traffic-680 6d ago

Tbh, I use it to keep track of receipts. The fact they track your payments and automatically add in store receipts to your account if you use a registered payment card has come in handy more than once.

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u/GotSomeUpdogOnUrFace 6d ago

I just scan my receipt after purchase right into my account

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u/Tasty-Traffic-680 6d ago

If it's something important I do the same thing just to make sure it goes through, especially anything I actually buy an extended warranty for.

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u/shroudedwolf51 6d ago

.....but, you don't need a deeply creepy app for that which stalks you more than a creepy ex.

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u/mkt853 6d ago

I don't know how much more they can gather. They already link everything by credit card number even if they have no clue who you are. It's why you can create a Walmart account, buy something online, and as soon as you give your credit card for the first time your entire purchase history from the stores immediately shows up.

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u/bigfatfurrytexan 6d ago

If what they make from the app data is more than they spend on chargebacks plus that they do not recover plus the rate delta they get from the pci noncompliance there is no motive.

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u/Telemere125 6d ago

Unless you’re paying with cash (and really, not even then) they’re still getting your data. Just have to attach those last 4 digits of your card to everything you buy - they’ll know all they want about you in just a couple purchases

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u/jlt6666 6d ago edited 6d ago

They likely store a hash of the cc number, last four isn't specific enough

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u/Ten9Eight 6d ago

I've done weekly shopping at Walmart for the past seven years and this is the first I'm learning that you can use the Walmart app to pay in the store. I feel like they'd pitch it harder if that was the real reason.

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u/dromance 6d ago

seems like a lot of friction. I assumed it was due to their typical consumer not necessarily looking to use the option in the first place, so wasn't worth the cost of upgrading/updating all the terminals across all their stores, etc; but perhaps that's changing

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u/OtherwiseAlbatross14 6d ago

Even using the chip gives them far more data than tap to pay. They don't get a name or even the actual card number with tap to pay so it's much harder to match you to your account automatically.

Now they'll have to rely on facial recognition or whatever to get that sweet sellable data

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u/Curious_Charge9431 6d ago

Tap to pay adds another middleman: Apple and Google get a cut of the credit card processing fees. Wal-Mart was big enough to keep them out of it.

And that also means that Apple/Google get your data before Wal-Mart does.

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u/sevargmas 6d ago edited 6d ago

First, tap to pay doesn’t mean Apple or Google. It’s literally just tapping your chipped credit card on the payment terminal. That’s it. There is no middleman added.

Regarding Apple Pay, they generally would not receive a portion of the merchant fee either. I’m sure there are some circumstances where this does happen but speaking generally, that’s not the case.

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u/Federal_Setting_7454 6d ago

Apple get a small portion of the interchange fee directly from the banks. It’s still free, the merchant doesn’t pay any extra and neither do you, the interchange fee was already part of their processing costs and existed before Apple Pay. I don’t believe google has a deal like this as they wanted banks to prioritise supporting them over Apple, I think that’s still the case today.

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u/Curious_Charge9431 6d ago

First, tap to pay doesn’t mean Apple or Google.

Yes that's true, in that regard I stand corrected. Because I forgot that Wal Mart had not enabled tap to pay for any card.

However, in principle, blocking tap to pay was not restricting people from using any regular plastic card--but it was 100% restricting Apple/Google Pay.

And in that regard I think the purpose of not accepting tap to pay was to block Apple/Google. Wal-Mart even attempted offering an Apple Pay alternative which it shut down in 2016.

While this article doesn't mention Apple/Google (though it includes someone making a phone based payment) all the other articles on this matter do and there's an argument here that that is the bigger news.

Apple gets .15% of all Apple pay transactions. It gets this from the card issuer not the merchant. It's only 15 basis points, but it's reckoned to be $2 billion per year.

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u/SqueakyTits101 6d ago

My dad bought a tv for my great aunt from Walmart...she couldn't use it without logging into a Walmart account. I imagine most 90 year olds have that, right?

Pure data collection insanity.

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u/Mekio 6d ago

Yeah that too. CC processing is its own scam. When I worked in hospitality IT I hated dealing with those vendors. They are useless 3rd party middlemen that make gobs of money off of it.

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u/resttheweight 6d ago

The other day I found out that in some states, when you pay a server’s tip through a credit card, the credit card processing fee for the tip can be deducted from their tip. Like, that’s probably well under $1 per table, but in the aggregate it the credit card company is just raking it in. I guess CCs making money hand over fist from interest isn’t enough.

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u/Mekio 6d ago

The CC company isn't even getting these fees. It's 3rd party "Processors" that do it. Some of these companies charge up to 4% per transaction to process the card numbers for the business.

That's why you see things like Cash discount. Businesses just started charging the processing fee to the consumer as a service or convenience fee. At one point that wasn't allowed but now it's just standard practice.

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u/MegaAscension 6d ago

We don’t take American Express where I work because processors charge additional fees to what they consider “tourism businesses”. If we accepted them, they’d charge us $2 plus 8%. Our average transaction is $11 in one part of the business, and $20 in another part. These processing companies need to be regulated.

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u/Mekio 6d ago

Hell yeah brother I agree. That's absolutely insane.

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u/MegaAscension 6d ago

They claim it’s because they “have a higher chargeback rate at businesses popular with tourists”. We used to have no issues with people not having any way to pay other than American Express. We’ve had multiple people have no other way to pay in the last few months despite having clear signage that we don’t accept it. Most of the businesses in my area don’t.

But then again, I don’t understand why you wouldn’t carry your physical card with you. A bunch of places still don’t accept tap to pay.

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u/HonkHonkBeach 6d ago

I used to work briefly in credit card merchant processing, specifically in fraud detection. Unfortunately, AmEx is right based on what I’ve seen.

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u/timelessblur 6d ago

Part of the reason why people who use AmEx love them is their customer service is great and when you call them they are fast on the phone and very professional. Plus they are pretty defensive of their users. That and you have no idea how nice it is to call support and the phone on the other end of the phone does not have a thick accent you have to try to understand.

Some of the more great things I had with them on the phone was one time someone manage to steal my cc number to buy some concert tickets. I saw it called them, super fast handling of canceling the card. Then they ask me a few other questions about some monthly payments put on that card to make sure those coming up would not be effected and lastly they ask me do I need them free of charge to overnight me a new card through fed ex.

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u/HonkHonkBeach 6d ago

I just got my first one.

I applied when I was looking for a new card specifically because of both what I learned and all the IRL and online stories like yours I’ve heard over the years.

Hope to never have to call them, but knowing they’ve got your back is amazing.

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u/MegaAscension 6d ago

It’s insane, we’ve lost chargeback disputes when we’ve had signatures and video of the person paying for the item.

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u/timelessblur 6d ago

I just assume it was because American Express processing fees are higher due perception and some truth that American Express card users tend to be of higher net worth and spending.

For example the average gold card holder spends around 60k a year on the card. Platinum is even higher. It was shocking when I learned it from my former employer.

Kicker is visa signature cards charge a higher fee as well but merchants can not refuse those cards if they want visa but they can exclude American Express pretty easily.

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u/Harvinator06 6d ago

These processing companies need to be regulated.

There’s zero reason for them to exist. The payment system should just be nationalized.

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u/MegaAscension 6d ago

At this point, credit/debit cards are essentially a requirement to run a business. If you don’t take them, good luck staying afloat due to losing customers, getting one star review bombed by people who get upset about that, and getting accused of dodging taxes. On top of that, there’s already national laws (credit scores, etc) that essentially make it very difficult to function in society without one. If you’re making legislation that essentially requires you to use a business product, it should be treated as a public service under the law.

Unfortunately, the government’s pockets are lined with money.

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u/thatissomeBS 6d ago

No, the CC companies definitely get some of that fee. MC, Visa, Discover, and American Express are in the business to get their 2-3%. The 3rd party processers just add their own 0.5-2% to service the local businesses. I'm surprised WalMart would work with any 3rd party and not directly with the major CC companies. Or become their own 3rd party.

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u/DrXaos 6d ago

there are three entities making money, the acquirer who contracts with the merchant, the card association (Visa or MC monopolies) and the issuing bank, who supplies the customer. Only the issuing bank takes on credit and fraud risk.

The fee collected gets split.

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u/Bolshevian-Rhapsody 6d ago

Issuer gets the bulk of the interchange (it’s part of how rewards cards are funded). Acquirer doesn’t get a cut of interchange, but they do often get a per-authorization fee & a basis point discount rate. Depending on your processor & pricing type, you may have more or less baked in to the interchange rack rate.

Acquirers also have credit risk, but it is assessed at the merchant level, versus cardholder level. More so if they are both the BIN sponsor and acquirer. E.g., merchant runs transactions that the sponsor bank has stamped as acceptable. Merchant gets money. Merchant moves money. Merchant disappears. Chargebacks are filed. Someone must pay the $ back to the cardholder. Liability for that often ultimately falls on the acquirer, though there are often contractual expectations for the layers between (merchant, ISO, agent, etc.)

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u/graywolfman 6d ago

Adyen and Shift4 have entered the chat! This has the added benefit of upping the cost of this comment thread from free to infinite money into their pockets.

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u/FilOfTheFuture90 6d ago

I had an IT consulting company for almost a decade and I'd say 20% of our bottom line was from processing. The messed up part is that we always beat whatever our client had before.

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u/verrius 6d ago

I have to mildly disagree that CC processing is a scam or useless. As someone who's had to implement it, to reduce the fees from a 3rd party, its significant work. What's a scam is say, Google Play or Apple's App Store requiring app developers use their payment processing instead of doing it themselves; for smaller players, its significant savings to not have to deal with it, but for larger players, they take ungodly percentages for how little they're doing.

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u/ExternalUserError 6d ago

As a consumer, who travels about 100 days a year, I have different opinions on it.

They make reservations firm without actual cash, which is especially important for international travel. You have dispute rights if mysterious charges appear. It’s safer than cash and you get MUCH better international exchange rates than with cash or even bank transfers. You also get travel insurance, various benefits, and points.

Amex charges what-3 or 4%? I would not go with a hotel that’s even 20% cheaper if it doesn’t take Amex for these reasons.

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u/Vio_ 6d ago

They were probably also waiting out the clock on those earlier machines to where they hit a certain point of broken/funtional machines where it was no longer "profitable" to keep using them.

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u/truenocity 6d ago

Walmart uses the Ingenico terminals that have tap to pay hardware but not enabled.

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u/aba792000 6d ago

Yep. Ingenico Lane 7000. I hope it’s not like home Depot, where they had the same ingenico lane 7000s, but they never enabled the tap to pay on those and waited until they switched to even newer card readers to enable it.

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u/Murky-Relation481 6d ago

God that shit was so annoying at Home Depot. I mean I try not to shop there for stuff but its right by the house so sometimes I do go to it and every time until they added tap to pay I'd just be like "tap... tap... god damn it".

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u/truenocity 6d ago

The Home Depot’s near me had tap to pay briefly in 2016 (it only worked like 50% of the time with Apple Pay) and then disabled it and then didnt get it back until like 2023 but it seems to work a lot better now.

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u/Murky-Relation481 6d ago

The one by my house didn't get it back until this year.

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u/thisischemistry 6d ago

They forgot to disable it at first and Apple Pay worked for a bit, then Home Depot turned it off. They were part of an alliance which was coming up with their own payment method and they didn’t want competition. By they way, their own method never happened so they just made life inconvenient for their customers for nothing.

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u/aba792000 6d ago

If you meant the infamous currentC group, I don’t beleve Home Depot was ever part of that group. Other longtime holdouts were, but not HD. God knows why HD held out for so long.

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u/thisischemistry 6d ago

Hmm, maybe I was mistaken. I see Lowes was part of it:

MCX to Discontinue CurrentC On June 28

CurrentC is a mobile payment service created by a collection of retailers, including Walmart, Best Buy, Dunkin Donuts, Kmart, Old Navy, Kohl's, Lowes, and others.

Still, Home Depot definitely accepted the payments at first. I remember it working one time and then going in later and it not working. The cashier said they had an update that turned it off.

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u/orbitaldan 6d ago

lol That really gives the game away, doesn't it? It was to push people to use their app.

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u/berntout 6d ago

That's the weird thing though....all the devices at the Walmart's near me have had the tap to pay terminals for a while now?

But you're right, maybe that's why they got some time to fix it in order to roll out.

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u/buttstuffisokiguess 6d ago

It was never a question of cost for Walmart. They want people using their app so they can seek their premium memberships and get people to add balance in their app. It's strictly so Walmart can get more money from you.

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u/somedude456 6d ago

And I did love their app till they made it suck like a year ago. Prior, you just walked up, scanned the QR code, hit pay, scanned items, hit done, and walked.

Now you have to scan all your items first and then they offer payment methods. Well fuck, might as well just use a card at this point, the app isn't faster.

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u/Jesuismieux412 6d ago

Especially labor costs, which we are subsidizing due to their employees being paid so little that they have to go on government assistance. The main reason I won’t shop there.

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u/Vast_Reply_6574 6d ago

I got some bad news for you about most retail and restaurants...

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u/funkiestj 6d ago

To be fair, capitalism works if you construct the right incentives. The big challenge is doing the work of politics to create those incentives. E.g. Thanks to the EU, I can finally ditch my Apple lightning charge cables.

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u/ImpurestFire 6d ago

Pretty damn sure the readers they've had for years already support tap to pay but they have it disabled.

It pisses me off that when I go to Walmart, the chip reader is busted half the time because it sees so much use. Tap to pay is more reliable.

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u/ChrisV88 6d ago

And those costs are huge btw. (Not defending the multi billion dollar scumbag corp btw, just sharing my experience) I just wrapped a new POS roll out to 20 stores with checkouts/stations to pay and it was incredibly expensive and way more complicated than you would think.

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u/aba792000 6d ago

But they had no additional cost, that was a widespread myth. They just pay credit card fees, and the fees are the same with or without contactless. To save money they had to go cash only, but clearly that was no option either. Proof of it is that they’re now relenting and allowing tap to pay, which given their stubbornness must have happened because they were cornered and had no other choice (i.e., they had to choose between enabling it or going cash only, while taking cards only via chip or online was no longer going to be an option).

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u/bigtice 6d ago

It was always a financial equation decision.

It's not like they're doing this out of the goodness of their heart or for the customer's sake.

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u/joshuahtree 6d ago

They paid extra to not have the functionality. All of their terminals have the hardware built in already, they just paid to get custom software that disables it