Will CVS succeed as it joins the mobile payment fray?
Move over Apple, Starbucks, Walmart, et al — CVS Health is getting into mobile payments.
The company announced yesterday the addition of CVS Pay to the chain’s mobile app. The upgraded app integrates the payment option with its ExtraCare loyalty program and prescription pickup capabilities. The mobile payment option, which works on both Android and Apple devices, is initially being launched in Delaware, New Jersey, New York and Pennsylvania, with plans for a nationwide rollout to CVS’s 9,600 stores later this year.
To use the new mobile payment feature, CVS customers add their credit or debit card information to the app. At the checkout, they pull up a barcode that cashiers scan to process the payment. Customers receive a confirmation within the app that the payment has gone through.
“Over the past year, our digital team has brought to market numerous new digital tools — like CVS Pay — that make shopping at CVS Pharmacy easier and more convenient,” said Brian Tilzer, senior vice president and chief digital officer, CVS Health. “We’ve been excited by the level of customer adoption of these digital solutions, and we will continue our quick pace of innovation and deployment to make our customers’ health care experience even easier.”
Twenty-eight percent of smartphone users have made a mobile payment over the past year with a third of those purchasing something in a store, according to a Federal Reserve survey conducted earlier this year, Fortune reports.
Research by eMarketer, according to a USA Today report, shows about 20 percent of Americans using mobile payment methods in stores. The number of individuals using mobile payments has increased 62 percent since last year.
- CVS Pharmacy Launches Breakthrough, End-to-End Mobile Payment Experience – CVS Health/PR Newswire
- CVS Will Let You Pay for Prescriptions With Your Phone – Fortune
- CVS joins the mobile payment app parade – USA Today
DISCUSSION QUESTIONS: Why are CVS and other retailers developing their own mobile payment options rather using third-party apps such Apple Pay? Will this approach help or hinder CVS in its attempts to increase usage of its mobile app?
Join the Discussion!
5 Comments on "Will CVS succeed as it joins the mobile payment fray?"
You must be logged in to post a comment.
You must be logged in to post a comment.
Principal, Cassarco Strategy & Analytic Consultants
I understand that it pains retailers to pay fees to MasterCard, Visa, Amex, Apple and so on. But development of single-merchant payment systems flies in the face of what consumers want, which is more convenience. Consumers want fewer cards, not more.
President, Max Goldberg & Associates
Consumers don’t want or need another standalone e-payment option. They want simplicity, and that means one payment option that can be used everywhere, like the credit cards or cash that they currently have in their wallets. Then again, maybe they will adopt CVS’s e-payment app simply to stop getting a three-foot long receipt after every CVS transaction.
Co-founder, RSR Research
Ken has it exactly right. Take Apple Pay or Google Wallet. Neither requires an app. All CVS is trying to do is leverage the bad investment they made in MCX.
Consumers still don’t care. It doesn’t solve anything for them.
President and CEO, ProLogic Retail Services
In theory, offering shoppers a mobile payment option within a mobile app enables the retailer to maintain control of the shoppers’ activity from browsing through selection through purchase. However, there has to be a compelling advantage for shoppers to stay within a particular retailer’s environment for all their purchase activity.
Starbucks has recreated their buying experience into their mobile app, with integrated payment as a key component. The clear benefit of the Starbucks system is avoiding the lines and wait times. What is the compelling benefit for CVS? Why is paying with a phone better than paying with a credit card?
Principal, Retail Technology Group
I do agree with the consensus of my colleagues that the industry does not need another proprietary payment app. I haven’t downloaded the app yet but, from the description I read, there is reason to believe that the app is more efficient in that it combines the loyalty ID and payment functions into a single step, which is time saving to the consumer and to the cashier. If this is the case, and the customer can pre-determine the credit card of choice that is invoked whenever the customer uses the app, then there is no deterrent to using it.