Target Steps Up its Mobile Payments Presence

January 29, 2019         By: Steven Anderson

For a while, Target was something of a mobile payments wasteland, not really accepting much in the way of mobile payments systems. However, that changed recently with a new report from the company that it was effectively opening the floodgates and bringing in virtually all major mobile payments varieties to its operations.

Not only will it take all three of the major Pays—Apple Pay, Google Pay and Samsung Pay—but it will also take “contactless cards” from American Express, Discover, Mastercard and Visa.  Target will accept these payment methods in every store, so there’s no concern about not having access somewhere along the line.

This is a big change for Target, but interestingly, it’s also part of a big change for Apple. In recent days, Apple not only added 1,850 Target locations to its roster, but also 245 Hy-Vee supermarkets, about 3,000 Speedway convenience stores, over 2,200 Jack in the Box locations, and a whopping 7,000 Taco Bell locations. Apple Pay is now accepted at 65 percent of all retail in the United States, including 74 of the top 100 merchants.

That’s not to say Apple scraped up all but the smallest holdouts; Walmart is still shunning Apple actively, but so too are supermarket giant Kroger and home improvement chains Lowe’s and Home Depot.

451 Research analyst Jordan McKee noted “… This is important because Target is a major merchant with a large US footprint and is characterized by high customer visit-frequency. Acceptance of Apple Pay by merchants with high customer visit-frequency means there is a greater likelihood that the process of ‘tapping to pay’ will become habitual for shoppers. While consumer adoption remains tepid, merchant acceptance is growing.”

It’s not surprising to see Target finally break down. With mobile payments on the rise—though still a comparatively small part of the overall retail payment landscape—Target needs to get a piece of that market lest it fall to competitors, particularly Amazon. Brick-and-mortar shopping itself has been falling off in recent years, and though physical retail is still top of the heap, consumers have options, and are exercising them.

Target’s move to take more payments should help it get, and keep, customers. That’s a survival move in an environment with more retail choices than ever, and one that should be valuable going forward.