So far, Walmart has been more publicly outspoken than Amazon about adopting the Federal Reserve’s forthcoming FedNow instant payment platform. However, the eCommerce giant is well aware of the new payment rail, and other moves suggest that early adoption of FedNow ahead of the platform’s July launch cannot be ruled out for Amazon, either.
At the Faster Payments Council’s 2023 Spring Member Meeting in March, Walmart’s senior director of payments Matt Howarter spoke on a panel entitled “Business End-Users Mega Use Cases.” The council’s executive director, Reed Luhtanen, wrote in a blog post that Howarter discussed Walmart’s potential interest in implementing the government-backed FedNow instant payment platform. Part of the retailer’s interest lies in providing customers with payment choice beyond traditional card rails, which not only improves choice but might also serve as a customer experience booster.
“Over 45 percent of calls to our call center are ‘Where is my refund?’” Howarter said during the panel. “Faster payments present the perfect opportunity to be able to leverage the technology to improve that customer experience.”
PYMNTS’ collaboration with ACI Worldwide, “Navigating Big Retail’s Digital Shift,” found that merchants and retailers in general have become increasingly open to real-time payment acceptance.
Source: PYMNTS
Navigating Big Retail’s Digital Shift, December 2022
N = 151: United States retailers, fielded June 1, 2022 - June 21, 2022
While less than 3% of merchants currently provide real-time or instant payment methods, 33% plan to implement the capability over the next three years. It is by far the payment system most retailers anticipate adding, with Venmo’s second-place share being just 24%. If real-time payments are on the horizon for one-third of retailers, it makes sense that well-funded industry leaders would not let themselves fall behind.
Amazon has been comparatively silent on any current or future plans to expand its consumer-facing payment infrastructure and include real-time capabilities. However, this doesn’t mean that implementation is any less likely, as Amazon seems aware of the benefits offering instant payment choice may provide. In 2019, the eCommerce giant submitted its opinion to the Federal Reserve on FedNow’s planned services, with the letter highlighting the instant payment system’s benefits for a customer-centric company like Amazon. While Amazon didn’t commit in the letter to using FedNow, it “strongly encouraged” the Federal Reserve to develop the payments infrastructure. Despite the current silence, there is still the distinct possibility that the company may still implement FedNow before its July launch.
Additionally, Amazon has other tools in its payment toolbox, which may make the company need FedNow less than Walmart does. In late March, the retailer rolled out its Express Payout system, which provides its merchants with faster working capital, possibly in an effort to incentivize continued selling on Amazon’s platforms. The feature allows merchants to receive deposits of up to $1 million within 24 hours, instead of the traditional transfer time of three to five days.
As closely as Amazon and Walmart compete with each other, the strategies that the retailers take to arrive at similar goals sometimes take distinctly different paths. Whether that applies to FedNow implementation remains to be seen, or if these companies ultimately opt to go their own ways in offering their customers real-time payment capabilities.
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