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Retailers Embrace Payment Apps to Sidestep $90 Billion in Swipe Fees

Merchants hope to mimic the success of Starbucks and Walmart, which have baked the apps into their loyalty programs.

Inside A Wal-Mart Stores Inc. Location Ahead Of Black Friday
Photographer: Patrick T. Fallon/Bloomberg

Retailers have been trying for years to escape the clutches of the credit-card companies, which this year will levy more than $90 billion in swipe fees on an industry already struggling to navigate the shift online. Some believe the answer lies in payment apps.

While shoppers have largely shunned mobile payments offered by third-party providers like Apple Inc., retailers are trying to persuade customers to embrace the technology by dangling discounts and other perks. Several chains, including Walmart Inc., Starbucks Corp. and Kohl’s Corp., have had some success by baking the apps into their loyalty programs—and more than half of companies surveyed recently by the National Retail Federation said they’ve implemented “branded digital wallets” or are considering it.