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Walmart (WMT) is reportedly planning to introduce an upgraded payment system next year that will give shoppers the option to pay directly from their bank accounts for online purchases. This bold move could potentially reduce fees for the retailer.
Walmart initially introduced this feature with Walmart Pay earlier this year, but those transactions typically took three days to process. With this new system, customers will receive immediate updates to their bank accounts as soon as a transaction is finalized, and Walmart will receive those funds right away.
Jamie Henry, Walmart’s vice president of emerging payments, told Bloomberg that the system is designed to help customers better budget their finances. Real-time processing allows shoppers to see their payments instantly, eliminating the concern of having some “phantom payment out there” pending for days.
As consumers become frustrated with card processing fees and more banks start to implement systems for real-time payments, options like pay-by-bank are becoming more attractive. Retailers like Walmart stand to benefit from this sort of strategy, largely because the option bypasses those card networks.
When customers use a debit card, transactions go through networks like Visa and Mastercard, which charge merchants (in this case Walmart) processing fees. Not only does the upgraded system stand to reduce fees for Walmart, it could also lead to lower prices for consumers in the long run. Shoppers will need to create a Walmart profile and add the new payment option, along with their bank information, in order to use the pay-by-bank feature.
The announcement of the upgraded payment system coincides with Walmart’s holiday shopping plans, which are arriving at the same time as Amazon’s upcoming Prime Day-like event.
