If you use Apple Pay or Google Pay when paying at the supermarket. At the pharmacy or other retail stores, you see how convenient it all is, even if you have to use your fingerprint or face to verify your identity. Apple and Google take so little of your purchase that the big bucks come in volume. For example, Apple is supposed to earn 0.15% (not 15%, but 0.15%) of the value of a transaction paid with Apple Pay. So a $10 purchase gives Apple a penny and a half, while a $100 purchase puts 15 cents in its pocket.
When you think about how many times an iPhone is whipped per day to cover a purchase, you can see that even when you get crumbs from your transaction cake, it adds up to a lot of money for the company in a single 24-hour day. Apple would likely make more money from Apple Pay if the nation’s largest retailer was on board. Yes, that’s right. You can’t use Apple Pay at Walmart.
Given that the discount retailer brings in nearly $1.6 billion in revenue every day, surely a small percentage of that money would end up in Apple’s coffers thanks to Apple Pay. Walmart has its own Walmart Pay system that works with QR codes. We first reported on Walmart Pay when the retailer was expanding it back in 2016, and it just didn’t catch on along the way as Walmart thought it would.
Daniel Eckert, a former senior vice president at Walmart, told Bloomberg in 2017 that Walmart Pay will soon surpass Apple Pay in the number of shoppers using the service at eligible stores. At that time Eckert said: “If the daily registrations don’t slow down, I think it will be pretty good on the cards soon. I should imagine we’re pretty close.” These words refer to former Microsoft CEO Steve Ballmer’s initial response to the iPhone when he said of Windows Mobile: “I like our strategy. I love it…now we sell millions and millions of phones a year. Apple sells zero phones a year.”
Looking at Walmart, it’s hard to believe that giving up 0.15% of transaction value would drastically hurt the company’s profit margins. And that could more than make up the difference, bringing some of the business back to Target and other Apple Pay-enabled retailers. Maybe the company is too invested in Walmart Pay to admit it made a mistake.
With that in mind, kudos to Kroger for realizing that not allowing Apple Pay at the cash register wasn’t a good strategy. Now we’ll see if Walmart can take it on its own. It should also be noted that Walmart does not accept Google Pay or any other mobile or digital wallet.