Publix Is Shutting Down Its Payment App

As some merchants continue pushing customers to pay through their apps, one major retailer is moving in the opposite direction. The Florida-based grocery chain Publix recently notified customers by email that its payment app will be discontinued starting March 19.

The Publix Pay app allowed shoppers to store payment methods—including debit cards, credit cards and gift cards—on their mobile devices. In-store, customers could scan a QR code at checkout and complete the transaction using a PIN-protected payment tool.

Publix has not offered a reason for the decision, but it may reflect a challenge common to app-based checkout: distinguishing between customers who paid through the app and those who simply walk with unpaid merchandise.

“Changes to their payment tech stack could have forced this change, but I suspect it was something more basic: inventory shrinkage,” said Don Apgar, Director of Merchant Services at Javelin Strategy & Research. “For example, you can use the app to pre-order deli items, and presumably you could pay through the app as well. The big question is, how does the store confirm payment when you are walking out with the products? This basic problem has thwarted all major retailers from implementing a pay-by-app function.”

Trying to Find Savings

Retailers could stop shoppers who use the app to confirm that payment was made. But assigning an associate to that task would eliminate any labor or time savings. It would also offer little added convenience for customers, who could just as easily stop at a register or self-checkout to pay.

Even if the store can confirm that a payment was made from a shopper’s device, it still must ensure the payment covers everything in the basket. That requires a more sophisticated system than a simple payment app.

“Theoretically, this could be accomplished using an RFID tag on every item and geofencing for your phone,” Apgar said. “As you exit the store, scanners can detect every item in your cart and match them with the payment you made via the app. But this tech is very expensive to deploy at scale, so the question loops back to whether this offers enough convenience to justify the costs?”

Other Options Remain

The app would still have been secure for in-store pickup and home delivery orders, where consumers aren’t leaving the store with items. Going forward, shoppers using those services will pay via the retailer’s website.

Publix customers can still use gift cards stored in their digital wallets, and contactless options such as Apple Pay and Google Pay will continue to work at store registers.

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Tags: Apple PayGoogle PayGroceryPayment AppsPublixShrinkageUnattended Retail