Launching a revolutionary digital wallet is going to prove challenging even for Apple as it lobbies retailers large and small to invest in the technology.
Just two days after Apple debuted Apple Pay at its much-anticipated iPhone event, the world's largest retailer—Walmart—says it won't buy into the mobile payment system, according to The Wall Street Journal. Best Buy also won't support Apple Pay.
The service allows consumers to pay with the iPhone 6 thanks to near-field communication (NFC)—chips in the phones that communicate wirelessly with readers at checkout counters. The trouble is major retailers like Walmart want payment systems that cover a range of phones, not just Apple, and smaller stores could be reluctant to pay up to $500 for NFC readers.
Still, Apple Pay has the support of a wide array of merchants. The company says 220,000 locations will accept it, including McDonald's, Bloomingdale's and Macy's, the Journal reported.
Apple's entry into payments shows just how fragmented the space is, one of the biggest hurdles to consumer and merchant adoption of the technology. Google, Square, Amazon, PayPal and others are developing rival and overlapping services. The Journal noted Apple might find that a number of smaller stores and restaurants—maybe millions—already have rival payment systems that won't support NFC.
Google Wallet is one of the few NFC payment services. It launched in 2011 but has struggled with minimal adoption, according to the newspaper.
Walmart and Best Buy are supporting a payment technology developed by the retail community called Merchant Customer Exchange, which has an app for Android and Apple phones. The app—a digital wallet—will link to checking accounts and enable payments with a QR code scanner, not NFC.
Target is reportedly on board with the Merchant Customer Exchange, but it also said it would support Apple Pay.