Walmart will soon offer instant bank payments to shoppers

Walmart is getting ready to offer shoppers an option to instantly pay directly from their bank accounts via a partnership with  global financial services tech company Fiserv, reports Bloomberg.

Walmart Pay made pay-by-bank an option earlier this year, but that process took about three days to finalize transactions. Now, transactions will happen instantly, and Walmart will receive the money immediately. 

And most significantly, Walmart will avoid paying fees to credit card companies. With U.S. credit card swipe fees making up 2.24% of the average transaction, even converting a fraction of consumers to pay-by-bank could mean billions in savings for the retailer.  

“I think giving consumers different options to pay for their purchases I view as always a good thing,” said Nick Ewan, senior editorial director for loyalty points website The Points Guy. “How this actually translates to the actual experience for the customer, that remains to be seen.”

Walmart had not responded to a request for comment in time for publication of this story.

It remains to be seen as to how the retailer will lure shoppers to sign up for the pay-by-bank service. Ewan noted that only a few major retailers currently have the capacity to pull off the process.

The retailer’s pay-by-bank offering with Fiserv is expected to launch in 2025. Transactions will occur over Fiserv’s NOW Network, according to Bloomberg. NOW Network integrates with The Clearing House’s Real Time Payments network and FedNow, which is a product of the Federal Reserve.

Large retailers have not introduced real-time payment options to customers because many banks were not connected to an instant settlement system, Bloomberg noted.

Pay-by-bank will be offered for online checkout at Walmart.com. Customers can already set up a profile and opt to use pay-by-bank as a payment option. Fiserv’s AllData platform connects with bank clients and vendors to link and authenticate consumer accounts.

Walmart has not had the best relationship with credit card companies in the past.

In March, a federal judge allowed the retailer to exit its deal with Capital One after Walmart managed several outstanding customer service issues.

Walmart had accused Capital One, which was the exclusive issuer of Walmart-branded credit cards, of slow transaction posting on cardholder accounts and failing to replace lost cards in a timely fashion.

And the retailer is not alone in the fight against credit card companies. Woodmans refuses to work with Visa and Mastercard and will only accept Discover, debit cards, cash or check. .

In 2023, the Credit Card Competition Act was reintroduced in the House and Senate. The measure required big banks to allow at least one network that is not Visa or Mastercard to be used for their cards. The goal was to increase competition for credit card processing networks and give retailers more choice.

Amazon, Best Buy, Kroger, Shopify, Target, and Walmart were among 2,000 retailers, platforms and small businesses hoping the bill would pass, according to reports. The Senate’s version of the measure, however, was referred to the Senate’s Committee on Banking, Housing, and Urban Affairs and has not been brought up for a vote since.

Swipe fees have more than doubled over the last decade and hit a record of $160.7 billion in 2022, according to the Nilson Report, a publication that covers the global payment industry.