Kohl’s, which was one of the first major retailers to accept Apple Pay, is now jockeying for a spot in consumers’ digital wallets with its own in-house mobile payment option, called Kohl’s Pay.

The mobile payment option will house the company’s popular Kohl’s credit card program, as well as enable contactless mobile checkout at Kohl’s locations. Customers can now make purchases with Kohl’s Charge cards through Kohl’s Pay.

“Several large-scale retailers are opting to introduce their own branded mobile payment services because of the added benefits of having payments connected with their loyalty program and the associated customer information it captures,” said Ryan Grogman, vice president of Boston Retail Partners. “One of the easiest ways to identify customers is in the payment space.

“In exchange for valuable data, merchants can give shoppers a more personal and ‘frictionless’ payment experience.”

Kohl’s Cash
Kohl’s has a number of loyalty and rewards programs that all fit under the banner of the Kohl’s Charge card.

Kohl’s Cash, Yes2You rewards and standard Kohl’s offers were previously separate channels for customers to earn points and save money. Now, with the advent of Kohl’s Pay, all of these programs will fit into one mobile application.

The points earned with Kohl’s Cash as well as specific offers and sales are all now integrated into the Kohl’s Pay app. That means customers no longer have to keep track of their Kohl’s Cash points or other systems and manually apply them to their transactions.

Now, these deals and points can be redeemed automatically through the use of the Kohl’s Pay app.

Kohl’s Pay will be housed in the retailer’s standard mobile app and can be accessed from a specific Kohl’s Pay tab. Users can simply enter their Kohl’s Charge information into that tab to unify the two and begin making Kohl’s Charge purchases through their phones.

As opposed to contactless NFC technology that many mobile pay options use, such as Apple Pay, Kohl’s Pay makes use of QR codes, allowing customers to scan a QR code generated by the merchant through their phones camera to finalize the purchase.

Privileged position
In addition to the ease of making payments, the app will also now come with a section called Store Tools, which turns the app into an in-store shopping companion by putting it into store mode. Once in store mode, the app can be used to do research and make purchasing decisions.

The relative popularity of Kohl’s credit card program puts it in a unique position among larger retailers to have its own mobile payment option. Other large retailers such as Walmart have also made the leap from supporting outside systems such as Apple Pay and Samsung Pay to opting for their own private systems.

“With the main focus still on updating antiquated point-of-sale systems and wrapping up payment security efforts (end-to-end encryption, tokenization and support for EMV), most retailers aren’t prioritizing their own branded mobile wallets high on their strategic initiative list for 2016 and heading into 2017,” Mr. Grogman said. “Only the largest retailers with enough critical mass can feasibly build out an app with payments capabilities that truly adds enough value to the customer experience to be worth the investment.

“With its existing in-store app and the ability to support alternative payment types such as Apple Pay and Visa Checkout, Kohl’s has a solid foundation upon which to layer on its own mobile wallet,” he said. “Its continued enhancements to the customer experience through the use of technology is one of the reasons it has been able to maintain relevance with the newest generation of shoppers.”