Over the past two years, major financial service providers and banks including Apple and JPMorgan have introduced various merchant payment processors like Chase Pay, securing partnerships with retail giants to handle merchant-to-customer transactions exclusively. In contempt of many merchant-focused services in the market, retailers such as Tesco are launching their own payment solutions for their customers.
PayQwiq, a digital wallet application developed by Tesco earlier in 2014, will be integrated by 500 London and Edinburgh Tesco branches to test out the payment app amongst a selected group of customers.
The Tesco digital wallet app has been in trial over the past two years, with deployment in 50 stores accross the UK. Starting with the London and Edinburgh roll out of its software, Tesco is planning a serious implementation of its financial network for customers.
The integration of PayQwiq at the designated 500 store branches will allow customers to pay for groceries and items worth up to $330. If the payment application is executed and distributed successfully, Tesco will launch the PayQwiq app to its branches in Ireland, Plymouth, Cardiff, and Dundee, as a part of its nationwide rollout.
“At Tesco we are always looking to make the shopping experience easier for customers and that’s why we’ve developed PayQwiq,” said a Tesco spokesman told the Grocer. “Feedback from customers who have used PayQwiq has been very positive, and we’re delighted to extend the availability of PayQwiq to Tesco customers in more locations.”
The active development of fintech solutions by retail giants is setting a precedent for other major corporations in multi-billion dollar industries to ponder the impact of innovative payment applications and networks in their operations.
For instance, Tesco can save a substantial percentage of their store revenues by deploying their own financial network instead of relying on a third party application. If Tesco operates on a partnership with a bank or a financial services company, it will be required to pay nearly 3% of their sales as transaction fees, which are charged to both Tesco and its customers.
The increasing interest of key players in the retail industry in fintech and emerging payment solutions will spur competition amongst existing financial networks like Chase Pay and Apple Pay, that are heavily reliant on their partnerships with retailers.