In a reversal of its longstanding aversion to Apple Pay, Walmart has acquired a company that not only accepts Apple Pay, but gives customers an incentive of 1.5% off the purchase to use a debit card loaded into Apple's mobile pay system.

In agreeing this week to acquire for $3 billion as a way to strengthen its e-commerce position against rival, Walmart most certainly wasn't basing its decision solely on payments's e-commerce technology and large customer database pulled the weight on this deal.

But brings Apple Pay into the Walmart fold at least with the app, where Apple Pay becomes the default payment type if the iPhone user has it up and running on the phone, said Richard Crone, chief executive of the San Carlos-Calif.-based payments consulting company Crone Consulting LLC.

Crone said his company's recent research indicated that as much as 35% of the payments to payments through the iOS system were coming from Apple Pay as customers responded to the cost-cutting incentive.

"It is very unlikely that Walmart would make any type of move to not accept Apple Pay through," Crone added. "This deal for was driven by marketing, not treasury."

It's been nearly two years since Walmart executives were clinging to their role in the Merchant Customer Exchange mobile wallet development as a key reason for not accepting Apple Pay in their stores. It started a mini revolt against Apple Pay amongst other MCX members shortly after its launch.

Since then, the MCX CurrentC mobile wallet experiment was shut down before a national launch, and Walmart released Walmart Pay two months ago for mobile payments in the store.

Any other type of payments technology that competes for speed or a seamless consumer experience will be measured against what Amazon offers in the future, but the door is open for Walmart to incorporate Walmart Pay as an option in a more powerful e-commerce setting, while continuing its mobile trend of accepting all card payments.  

"Walmart Pay blew away all of the restrictions the company has had and countered to in lawsuits with Visa and others, to accept all card types and incur card-not-present rates for Walmart Pay," Crone said. has a similar setup with Android Pay through that operating network, and both Android Pay and Apple Pay have been featured in past temporary deals for 10% off purchases made through those wallets.

Still, in the same manner Walmart has fought against credit card interchange rates, the site, in part, echoes the same feelings by informing its customers that prices can be kept lower if transactions are completed with debit cards.

"It is cheaper to go through debit than it is for credit for Walmart," said Larry Berlin, vice president with Chicago-based First Analysis Securities. "This will really be Walmart steering the customer to the cheaper payment mechanism, and puts them right back in the disputes with the card networks and PayPal over rates."

Walmart did not respond by deadline to inquiries about potential payments strategies.

However, it is clear that Walmart is banking on numbers has projected in the past regarding paying users of the site to make the acquisiton pay off. Those numbers not only would boost Walmart sales, but potentially convert more Walmart Pay users as a byproduct. A Wall Street Journal blog a year ago reported that was forecasting 15 million users by 2020.

 "Walmart is one of the top online shopping sites anyway, but getting Jet helps move them into the next new world with online, offline and pick-up at the store," Berlin said  "It [potentially] expands their presence in all of these areas and expands the presence of Walmart Pay in all of these channels."

Walmart will have to adapt to how has gone about accepting mobile wallets, but it does set up the retailer to "get Walmart Pay and all of the variations of it to transcend all of their products," said Brian Riley, an independent payments and financial services consultant.

Working through "the subtle issues of pricing" is going to be important for Walmart as it folds into its online business, Riley said.

"It is going to cost them if they offer 1.5% off on Apple Pay because they have participation fees as well," he added. "But Walmart knows how to negotiate payments pricing."

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry