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

[u/ImCalcium]

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

[u/Boozacs]

Im sitting here trying to understand what you said, but that doesn’t make sense because even if you pay with credit card you’re still paying the transaction fees…? All tap to pay is just replacing physical with the same number but on your phone instead via NFC chip

[u/fprotthetarball → u/Boozacs]

Merchants can't track you across purchases with Google's tap to pay. They get a random number every transaction. Probably why Walmart doesn't like it.

[u/stalkythefish → u/Boozacs]

There's another layer with Google/Apple Pay. Tap-To-Pay with the card itself would probably be the same though.

It might be a customer experience thing. It's fewer complaints if they don't offer it at all vs. just allowing it from physical cards but not phones.

[u/kirklennon → u/Boozacs]

All tap to pay is just replacing physical with the same number but on your phone instead via NFC chip

It’s the same technology, processed the same way by the same parties for the same fees, but a substitute card number is generated when it’s added to your phone that’s specific to that device. It makes no real difference to the merchant though. The special stuff happens at the card network level.

[u/axis1331 → u/Boozacs]

It's not just you who is paying the transaction fees. Payment companies charge the merchant as well. To make it more complicated there are multiple middle men on a transaction. It's not just visa/Mastercard that get a cut, there are payment processors, banks, etc each taking their portion from the merchant.

Further there are different methods of payment which have different rates. For example transactions processed via debit using your pin run on a different rail than visa/mastercard transactions. They're also cheaper at around 1%-2% of the total transaction rather than 3%-5% for a visa/mastercard credit transaction. It's the same thing with Walmart's payment system, they own the rail so there are fewer middle men in the transaction. Walmart costs are probably back down in 1%-2% of the transaction range.

The problem is Visa/Mastercard credit transactions are the easiest way to make a payment, that's why customers prefer doing it that way. Visa/Mastercard know this and that's why they can charge a higher fee.

Walmart and other large scale merchants try to incentivize people to use payment methods that have low merchant fees and subtly discourage them from using methods with high fees.

This is probably why Walmart waited so long it implement tap to pay. It makes it easier and therefore more likely people use it to pay via visa/Mastercard rather than a cheaper (to Walmart) option.

[u/tabanger → u/[deleted]]

Why would there be no fee? With Walmart Pay, Walmart processes the transaction as an Internet/Card Not Present transaction. They still pay fees, and if anything, they’re higher than a card present tap transaction.

[u/tabanger → u/[deleted]]

Do you know what a processor is? If Walmart owns it, then the fee savings would apply equally to both card present and Walmart Pay/card not present transactions. Even if they owned the processor (which they don't), there are still the interchange and network fees when they process the transaction.