March 2, 2012, 4:51 PM

Retailers work on their own mobile wallet

Wal-Mart is part of a pioneering group.

Lead Photo

About two dozen retailers are involved in the project.

Though mobile wallets that enable consumers to pay in stores with their smartphones have yet to catch on, it appears a group of about two dozen retailers want to have a say in how this payment method evolves.

Wal-Mart Stores Inc., No. 6 in the Internet Retailer Top 500 Guide and No. 4 in the Mobile Commerce Top 300, confirmed with Internet Retailer it is part of the group. The group is developing its own mobile payment system, which typically center on a mobile wallet. A mobile wallet loaded on a smartphone enables consumers to store payment card data in the phone to make purchases at bricks-and-mortar stores.

Meanwhile, Target Corp., No. 22 in the Top 500 and No. 31 in the Top 300, declined to say if it was involved in the effort. “We are exploring potential solutions that would help us to deliver the fastest, most secure mobile payment experience possible for our customers,” Target said in a statement. The retail chain declined to elaborate.

The retailer group does not even have a name, says a spokesman for the retailer group. “There is a lot that has not taken shape yet,” he says. “We would emphasize we are still very much in a formative stage.”

The retailer group, however, is not about competing with other mobile payment schemes, says Steve Mott, principal at the BetterBuyDesign consulting firm, which is working with the retailers. The project is open to any company that works toward the group’s objectives of producing a more efficient, safe and better user experience, he says. Any company willing to work toward those objectives is welcome, Mott says. He adds that the system is envisioned to work across mobile commerce, e-commerce and inside bricks-and-mortar stores.

In the meantime, that means no decisions have been made about a technology, which other companies might participate and how the system might work, the retailers’ spokesman says. “We are still exploring what different alternatives there are,” he says.

The retailers’ effort is the latest initiative by major organizations that see the potential of consumers paying with their mobile phones. Google Wallet from Google Inc. is available to Sprint customers. Currently available on one Sprint phone, Google says Sprint will make it available on 10 phones later this year. Google welcomes the retailers’ effort. "We think it’s great that there are other companies innovating in the payments space,” a Google spokeswoman says. “This will create more choice for consumers, and in the end we believe choice is a good thing."

Isis, a mobile commerce firm started by AT&T Mobility, T-Mobile USA and Verizon Wireless, intends to launch tests this summer. It recently announced that credit, debit and prepaid cards issued by Barclaycard, Capital One and Chase will be the first available in its mobile wallet.

“It’s obvious the retailers are not thrilled with what they’re seeing in the market,” says Rick Oglesby, senior analyst at consulting firm Aite Group LLC. Google and Isis are working with the wireless carriers, banks and payment networks, but the merchants don’t seem to be too involved, he adds. He suspects this retailer-driven project is, in part, about keeping the retailer brand visible. “That’s not where the payment networks and carriers are going with it,” he says.

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