Dive Brief:

• Microsoft has added tap-and-pay checkout functionality to its Microsoft Wallet mobile application, the company said Tuesday. 

• The tap-and-pay capability enables consumers to complete purchases in more than a million retail locations. The technology will initially roll out in the U.S. to Windows Insider program members carrying Windows 10-based mobile devices, including the Lumia 950, 950 XL and 650.

• Microsoft Wallet also stores retail rewards information and membership numbers, allowing customers to view or scan them from their smartphone.

Dive Insight:

Although this option moves Microsoft Wallet closer to the capabilities offered by rival services Apple Pay, Android Pay and Samsung Pay—and could also make the payments platform more appealing to app developers and device manufactures—it’s not likely to move the needle much for Microsoft, which is way behind in smartphone market share, 451 Research senior analyst Jordan McKee told Bloomberg.

Still, if Microsoft does indeed succeed in acquiring professional networking site LinkedIn, the software giant would be poised to offer mobile person-to-person payments and other services, in turn creating new revenue sources, Richard Crone, CEO of payments researcher Crone Consulting LLC, told Bloomberg.

There's still room to play in the mobile wallet sandbox. Mobile commerce is growing, but activity has been largely relegated to researching and comparing goods, rather than making purchases. That will change if and when smartphone users find that shopping on mobile is easier and secure (or at least secure enough).

“Mobile e-commerce has been growing by double-digit percentages year after year, so as we see this increase in usage and growth, we're also going to see growing demand for apps and technologies that make the mobile shopping experience better,” Ben Wong, VP of marketing at retail technology firm Bindo, told Retail Dive last year. “So things like more secure payment portals, easier payment methods (tap-to-pay, etc.), and more mobile integration into the physical store itself. All of these are things are ideas that could be brought together and provided by a proper digital wallet.” 

And the capacity to include retail memberships, rewards points and coupons could boost retail marketing and loyalty efforts, according to Mark Tack, VP of marketing at mobile marketing firm Vibes. While there remains a place for well designed, well working mobile retail apps, says Tack, their limits can be taken up by mobile wallets, and retailers should not shirk either.

“Retailers ask, ‘What role should my app play?’ and our take is ‘You need both,’” Tack told Retail Dive last year. “It’s a symbiotic role. But all marketing roads lead to mobile wallet.” That’s because the mobile wallet organizes everything in one place, Tack says, noting that few if any shoppers will be hitting individual retailer apps with such frequency, and, importantly, users seldom delete the content from their mobile wallets.