Is Amazon Pay coming to Brick and Mortar Stores?

Amazon Pay could come to brick and mortar stores. The Wall Street Journal reports Amazon (NASDAQ: AMZN) is exploring the possibility of letting people use its digital wallet through phones.

Amazon’s brick and mortar stores accept Amazon Pay. However, most retailers will not support Amazon Pay.

Notably, The Journal did not say how Amazon Pay will communicate with point of sale (POS) terminals. The Verge speculates that Amazon will add a quick read (QR) code feature similar to that in Walmart Pay to Amazon Pay.

A QR code wallet uses a phone’s camera to scan a bar code on a cash register. In detail, the bar code enables the wallet to make a transaction in a payment system. The advantage to QR code is a phone will not get direct access to a retailer’s network.

Will Amazon Pay be QR Code or NFC?

That provides more security than near field communications (NFC) apps like Apple Pay and Google Pay. To explain, NFC uses a wireless signal to communicate directly with a POS terminal. Hence, NFC gives a wallet access to a retailer’s systems and creates a security risk.

QR code has other advantages including the ability to work with almost any phone with a camera. Moreover, Walmart (NYSE: WMT) accepts QR code apps but not NFC. Hence, Walmart could accept Amazon Pay but not Apple Pay or Google Pay.

Additionally, Walmart offers its own QR code wallet called Walmart Pay. Markedly The Journal did not say if Walmart Pay will be integrated with Amazon Pay.

On the other hand, Amazon could adopt an NFC solution. Many Americans are familiar with NFC payment; but not QR code because of Apple Pay’s success. Finally, a QR code Amazon Pay will be an easier sell in countries like India and China where many retailers accept QR code payment.

What Retail Stores is Amazon Pay Coming To?

One thing is clear a widely-adopted Amazon Pay could make the Everything Store a major player in payments. Amazon has been offering digital wallets for years; for instance, Amazon Pay has been around since 2007, but it is rare outside the Everything Store.

Likely test markets for Amazon Pay’s brick and mortar solution include Whole Foods, Amazon Go, and the Amazon book stores. To explain, Amazon owns all those brick and mortar stores. Expect to see testing of Amazon Pay at Whole Foods and Amazon Go–if the Journal is correct.