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The Almighty Buck

Walmart Plans Instant Bank Payments, Cutting Out Card Networks (bnnbloomberg.ca) 54

Posted by BeauHD from the cutting-out-the-middle-man dept.
An anonymous reader quotes a report from Bloomberg: Walmart customers will soon have the option to pay directly from their bank accounts with instant transfers for online purchases. The enhanced feature is a flash point in the escalating tensions between merchants and the card networks setting the fees for payment processing. The world's largest retailer has offered pay-by-bank through Walmart Pay since earlier this year. Until now, the transactions were akin to digital checks and took roughly three days to finalize when being processed through The Automated Clearing House, the same network often used for bill payments or paycheck deposits. Soon, customers opting for pay-by-bank transactions will see the purchase reflected in their bank account balance instantly -- and Walmart will receive the funds immediately. [...]

Walmart's upgraded pay-by-bank offering will be rolled out in 2025. The transactions will occur over bank technology provider Fiserv's NOW Network, which integrates with The Clearing House's Real Time Payments network and the Federal Reserve's FedNow. Until now, large retailers hesitated to launch real time payment options because many banks were not connected to an instant settlement system, meaning their customers would not be able to use the product. NOW Network aims to connect to as many banks as possible to reach 100% of deposit accounts by combining its own network with RTP and FedNow. The instant pay-by-bank product will be available for online checkout on Walmart.com. The Bentonville, Arkansas-based retailer already has customers set up a profile when they shop online. If they opt to add pay-by-bank as a payment option on their profile, they will enter their bank login credentials to connect their account. Fiserv's AllData platform connects with their bank clients and vendors including Plaid, MX, Akoya and Finicity to link and authenticate consumer accounts. With this instant pay-by-bank product, consumers will avoid stacked pending transactions, which can open them up to the risk of overdraft or non-sufficient fund fees from their bank. "When the transaction processes as a real time payment, customers get immediate access to see that payment come through, I see it hit my account and I can properly budget," said Jamie Henry, vice president of emerging payments at Walmart. "It's not as if I've got this phantom payment out there that's going to take place a couple days down the road."

Walmart Plans Instant Bank Payments, Cutting Out Card Networks More | Reply

Walmart Plans Instant Bank Payments, Cutting Out Card Networks

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  • Other countries... (Score:5, Informative)

    by Bert64 ( 520050 ) <bert@[ ]shdot.fi ... m ['sla' in gap]> on Thursday September 19, 2024 @11:50PM (#64801681) Homepage

    Other countries have been doing this for years, Thailand for instance lets you scan a QR code to initiate an instant bank transfer, and the vast majority of retailers or even individual street vendors accept this payment method.

    Also unlike a payment card, it's a push method - you confirm the amount you want to send rather than the retailer having the ability to pull any arbitrary amount from your account.

    • Right. The main reason I discourage auto pay. It's either a credit/debit card or equivalent. Or my bank can send them a check.

    • Ayup, the world leader in technology is finally catching up after 40 years.

    • Re: (Score:3)

      by lsllll ( 830002 )

      I'd be all for this if I received a price break for using it. Saving customers from "stacked transactions" is a bullshit excuse to offer this service for. Give me a 2% discount and I'm there. After all, what's the incentive for me? If I use my credit card, I can always get my money back if I have any problem with the transaction. Why should I pay the same price when using this service?

      • After all, what's the incentive for me? If I use my credit card, I can always get my money back if I have any problem with the transaction.

        And there's the problem with American payment systems. Consumer protections have been outsourced to credit card companies for a serviceable fee rather than being legally guaranteed regardless of the method of payment.

        • Re: (Score:2)

          by Malc ( 1751 )

          I think the actual problem is that the service fees are invisible to the cardholders. This was great for kicking starting the whole concept of using cards, but maybe now it's time to change this so card holders pay the fees instead of the merchants. Many merchants can't choose whether or not to support Visa and Mastercard, and so it's an often an abusive situation, unless the merchant is as big as Walmart or Amazon. Card holders on the other hand will be much more resistant to paying fees and have choice

          • Some merchants make it clear that using a credit card will cost extra due to the processing fees. Gas stations are particularly famous for this, listing different prices for cash or card transactions.

            Given that credit card companies have been upping their fees on merchants, it's becoming more common to make those fees transparent to the customer.
            =Smidge=

            • Re: (Score:2)

              by Malc ( 1751 )

              Is than an American thing? It's probably illegal in many places, especially in Europe because the price you pay has to be the price you see. Airlines were an example that did this until a few years ago, but the EU forbade them from tacking on credit card fees to the advertised sale price like this.

      • Economic theory says you would benefit by reduced costs to the retailer because they would be able to charge you less while maintaining the same margins. It doesn't mean they would pass along the entire savings to you. Rather you would split the savings but still end up paying less.

        • Economic theory says you would benefit by reduced costs to the retailer because they would be able to charge you less while maintaining the same margins. It doesn't mean they would pass along the entire savings to you. Rather you would split the savings but still end up paying less.

          Let us know when that happens. Remember how ATMs were supposed to reduce costs for banks so they wouldn't have to charge so many fees? How did that work out?

    • Re: (Score:2)

      by Luckyo ( 1726890 )

      My understanding of those systems is that they work either within banking system and take a while to clear, or they function within a completely isolated payment network with its own wallet. In previous case most of these systems reserve the funds, but take a while to actually clear them. In latter the transfer is near instant, but it costs additional money to do so (usually paid by the merchant).

      The idea being used here is much more recent, that allows for instant clearing of funds. This usually requires s

    • Re: (Score:2)

      by Kisai ( 213879 )

      The problem overall is the ACH system is a "pull" system. To initiate a client-sided payment, the bank needs to have the merchant in their system, which generally they don't.

      This problem also exists in Canada.

      There is no way to secure ACH. Any mistake made by the checking system in the US or Canada requires a lot of steps to fix. This is why you pay for everything by credit card in the US and Canada, because you can always get the bank backing the card to reverse a transaction if the merchant won't. Having

    • Re: (Score:2)

      by Hodr ( 219920 )

      There have been many methods to directly pay from your bank in the US, for decades electronically and for over a century by check. Maybe they have better protections in Thailand, but paying for things directly with your bank account is a risk in the US.

      If you see a transaction you disagree with or didn't make on a credit card, the credit card company usually will instantly remove the charge and investigate. If you have something similar with an app that pulls from your bank (like cashapp or Venmo for inst

  • How is this different from the EFTPOS system that we have had in New Zealand for about 40 years?

    • Re:EFTPOS? (Score:4, Informative)

      by 93 Escort Wagon ( 326346 ) on Friday September 20, 2024 @12:06AM (#64801709)

      I don't even see how this is materially different from a debit card transaction... except you ("you" the Walmart customer) have given them your bank login info, like an idiot.

      • Re: (Score:2)

        by ukoda ( 537183 )
        Ah, so inferior to EFTPOS, which does not give any access info to the retailer.
      • I would reasonably expect that sharing your logon details breaks any end-user agreement with banks and invalidates any type of liability protection, putting the onus in case of fraud on the account holder.

      • Re: (Score:2)

        by lsllll ( 830002 )

        except you ("you" the Walmart customer) have given them your bank login info, like an idiot.

        I balked at that, too, when I read it. But I think the summary is misleading. I think your entering your credentials is done on the bank site and just to connect your bank account with this service. Much like when you enter your PayPal credentials, you're really not entering them on the site you're making a purchase from.

      • have given them your bank login info, like an idiot.

        I don't believe that is how it works and it would be a violation of your bank's ToS if it were. You log in to your bank account using your bank's website and via FedNow they link the payments. You never give anyone else your login system. That would be dumb.

      • In other, non-Amerian-Idiot countries, the payment request sends a message to your phone, to open your bank app and approve the payment to the vendor.
      • Only in the US can a company "pull" from your account without specific authorization. In any other country I am familiar with, having your account number, etc, only let's them send you money. The US really ought to fix this.

  • Um... no thanks... (Score:5, Informative)

    by ctilsie242 ( 4841247 ) on Friday September 20, 2024 @12:22AM (#64801737)

    I have to ask... Walmart doesn't offer any real benefits for this. Why would I use their payment method only as opposed to like almost every single retailer, and using cards or other payment methods? Why would I add another vector for someone to drain my back account for one store?

    Already, the WM shopping experience is miserable. If I want a taillight for a car, or a pair of socks, I have to wait a long time before a clerk can unlock the case. Then, the self checkout, where there are more loss prevention people standing around, hoping someone accidentally slides an item without paying for it... Combine that with the way reduced hours, and WM shopping is last on my list.

    The last thing I'm going to do is give WM access to by bank account directly. At least they can bring back some sort of restaurant in their stores, like how Target has a Starbucks, and have some method to get stuff out of locked cabinets that doesn't entail waiting interminably for a clerk. There are better ways to do this, even if is paper tickets that one takes to the counter to be scanned. Maybe even consider bringing back 24 hour stores.

    • If socks are locked up, that says something about the neighborhood you live in.

    • I have to ask... Walmart doesn't offer any real benefits for this. Why would I use their payment method only as opposed to like almost every single retailer, and using cards or other payment methods?

      Processing fees? You act like Walmart won’t find incentives for you to prefer using their preferred payment system. Like 2% off your entire order.

      At least they can bring back some sort of restaurant in their stores, like how Target has a Starbucks..

      Mine has a Subway inside. If were calling Starbucks a “restaurant”, then Subway is fine dining.

      and have some method to get stuff out of locked cabinets that doesn't entail waiting interminably for a clerk.

      Thats a bit trickier these days. Do you live in a state that still punishes crime? If not, I recommend moving to one. And do yourself a favor and don’t even bother with California. I believe they’ve fired up the foundry near the San F

      • Re: (Score:2)

        by gtall ( 79522 )

        "LOL. I agree, but you’d have to vote Republican." Like the orange criminal running the GQP?

    • While I wouldn't really be interested in this either, same security concerns - but anything that makes the credit card companies only useful for purchases on credit is a bonus in my book. The fees are outrageous, but what is more outrageous is that they are hidden from the card user.

      People seeing that purchasing that 500 TV incurs a swipe fee of nearly 3 percent to the retailer that is indirectly passed on to you, and that cash payer behind you... Actually it's the cash payers that should be outraged at

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      If it works like the system in the UK does, Walmart wouldn't get access to your bank account. It is a push transaction, a QR code tells your banking app Walmart's bank details and the amount, and you confirm it, and your bank sends it. There is a faster turn-around for confirmation of payment (instant) so you don't have to wait potentially a few hours for it to go through.

      At no point does the retailer get access to your account.

      That said, there is little incentive to bother with the hassle of doing it, unle

  • you either don't have the money or you want the rewards points. Or you don't want to give a rando company direct access to your bank account, there's that too.

    • Re: (Score:2)

      by sl3xd ( 111641 )

      Visa & Mastercard aren't just for credit - why would they limit themselves, after all? Plenty of debit cards use the Visa & Mastercard networks as well - though they're often the fallback compared to other debit networks.

    • you either don't have the money or you want the rewards points. Or you don't want to give a rando company direct access to your bank account, there's that too.

      I have the money and don't want to have it debited directly from my account. A credit card gives me a one-month float on my money and consolidates things into into one monthly payment, which I *always* pay off in full. Though I can understand why some people may want (or need) a debit card, I will never want/have/use one, credit cards are much better for those who can use them responsibly.

    • Re: (Score:2)

      by Bert64 ( 520050 )

      Well if you're paying with any type of card, you're giving them the ability to pull any arbitrary amount from your card any time they want. This is the whole reason why cards need to come with fraud protection guarantees, because fraud is so easy in that scenario.

      In most countries paying with a bank account does NOT work like this. The retailer only provides you with their account number, a reference and optionally an amount often in the form of a QR code for convenience. You enter that information into you

    • In the UK here, where pretty much everyone pays for everything by card, to the point that most people don't carry cash any more; I want the cashback, and the Section 75 protection.

    • you either don't have the money or you want the rewards points. Or you don't want to give a rando company direct access to your bank account, there's that too.

      There are many people that pay with a credit card for convenience. In many (most?) cases, if you pay your balance off at the end of the month you don't incur interest fees. Of course, the payment processor still takes whatever surcharge they're going to throw on. But I get consumer protections, ease of accounting like when it comes to the end of the year to do my taxes, and if I do run short one month I have a credit cushion. (Taxes come into play if you're in a situation like some 1099 employees where some

    • you either don't have the money or you want the rewards points. Or you don't want to give a rando company direct access to your bank account, there's that too.

      Studies have shown forcing you to peel off those $20 bills one at a time paying with cash, makes you about 18% more frugal.

      Naturally this is why a country that ties its GDP to domestic spending, would prefer to downplay the shit out of using cash.

      Rando company? It’s Wal-Mart.

      • Rando company? Itâ(TM)s Wal-Mart.

        That's a good point. Wal-Mart is much worse than just being some rando company.

  • If you expect less to pay less I have bad news, someone in the payment processing chain will take just as much as the card issuers would. First they won't, but it will equalize. Here we have 0.45% tax on every transaction to begin with. Then banks add their own fees. Then the provider of the qr code.

  • people who were born yesterday.

  • Mathy McMathface (Score:3)

    by geekmux ( 1040042 ) on Friday September 20, 2024 @02:36AM (#64801903)

    consumers will avoid stacked pending transactions, which can open them up to the risk of overdraft or non-sufficient fund fees from their bank. "When the transaction processes as a real time payment, customers get immediate access to see that payment come through, I see it hit my account and I can properly budget,"

    Risk of overdraft? Immediate processing lets people properly budget? You mean mathing the mathity math out of it doesn’t work anymore?

    The hell do people think happened when all of society was waiting for stacks of paper checks sent via snail mail to clear the bank over several days? You’re telling me “stacked pending transactions” is enough to what, avoid doing an ACTUAL budget?

    Pretty bad when you struggle to see how people would have survived even 30 years ago.

    • When cash was king keeping within your budget was easy, when your budget was empty so was your literal wallet.

      Now it's all just numbers on a screen. Or worse a phoney.
  • My MasterCard bank debit card works fine and the $$ is pulled before I get home. You learn to manage your budget whether debit, CC or cash ! If I use my CC, I get cash back and have consumer protection for what I buy. My choices.....

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