Walmart’s scale and installed base of loyal customers may move the needle on instant payments in general, and instant bank payments specifically.
PYMNTS Intelligence estimated earlier this year that as many as 30% of U.S. consumers have Walmart+ subscriptions, which means that they are arguably already pre-disposed to shop at the retail giant for their everyday needs, and to do so using digital options.
On Thursday (Sept. 19), the company announced that its customers (and by extension, its members) will have the option to pay directly — and instantly — from their bank accounts when paying online. Instant bank payments will launch next year, with transactions happening over Fiserv’s NOW network, which is tied into The Clearing House’s RTP® network and the Federal Reserve’s FedNow® Service.
Prior to the announcement, there had already been the option to pay by bank through Walmart Pay. The pay-by-bank terms and conditions page notes that the payment option is tied to the Walmart App or Sam’s Club App. Walmart also notes on its site that the company reserves “the right, in our sole discretion, to impose limits on the amount of funds sent through this service, on a per transaction or cumulative basis.”
In contrast, the new instant option will cut down on the traditional settlement period that has taken days and update the sender’s account details and balance in real time, while Walmart will receive the funds instantly.
For both sides of the commerce equation, then, there’s better cash flow visibility. Consumers can keep a closer eye on their proverbial till, which can help those of us living paycheck to paycheck and shopping digitally (Walmart’s latest quarter noted that overall eCommerce sales were up 21%). Separate PYMNTS Intelligence data estimates that even higher income shoppers have been coming to Walmart’s in person and online storefronts to get their shopping done.
For Walmart, the benefit is that real cash lands in its own coffers instantly, without paying interchange fees of 1% to 2% for card-based transactions. For the payments ecosystem as a whole, Walmart’s integration into both the RTP Network and FedNow Service may spur more banks to sign up and connect to instant payments infrastructure.
Our data shows that of the nearly 40% of consumers who opt to use, or have used, pay by bank payments where available, they have done so largely for convenience and lower fees. Logging into bank accounts rather than manually entering credit card details may indeed hold appeal for those consumers. We note, too, that there’s already precedent in the market (from utilities and other businesses) for offering incentives to sign up for instant bank transfers, perhaps even through discounts.
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