Harris Teeter's Home-Grown Mobile Wallet: Is This Grocery's Starbucks Moment?

Why is Harris Teeter making its own mobile wallet? The 212-store mid-Atlantic grocery chain didn't really build the wallet that it's piloting starting this month at a supermarket in suburban Charlotte, N.C.—it's using a white-label wallet from startup Paydiant. But why not PayPal, Isis, Google Wallet, Square or any of the other existing, fully developed mobile wallets? The answer may be right there in the question: Those name-brand wallets are too fully developed for what Harris Teeter has in mind.

Those big-name mobile wallets all have their own very specific transaction models. Their developers know exactly what they want their wallets to do and be used for, and retailers are the ones who have to make adjustments to shoehorn the wallet systems in. That's why retailers have to, in essence, be bribed—and the bribes aren't nearly big enough to really change a chain's behavior. To paraphrase the old light-bulb joke, it only takes one vendor to change a retailer's POS—but the retailer has to really want to change. And most retailers don't.

In that context, Harris Teeter's do-it-yourself approach makes perfect sense, because Harris Teeter isn't using this as an all-purpose wallet. The pilot is for a very specific purpose: Letting customers pay for an online grocery order at a curbside pickup.

If it works as planned, the customer will drive up, a store associate will flash her a QR code on the screen of a mobile POS device, the customer will scan the code with her wallet app, do a little more tapping on the app to choose a card and OK the payment, and the transaction will be complete.

That means the customer doesn't have to hand over a card, get out of the car or sign anything. No equipment has to change hands. Why not have customers pay in advance online, or swipe a card in an associate-held scanner, or use a Starbucks-style prepaid account? Those approaches all might work fine. So would Isis or PayPal. They just don't happen to be what the retailer wants to try.

The only thing Harris Teeter wants customers to use its shiny new "HT Express Pay" for is drive-by grocery pickup. Not in-store payment. Not loyalty. Not CRM. Not coupons or offers or check-ins. For now, just curbside pickup of online orders. It's about as purpose-specific as anything in retail could be. Which means Google Wallet or Square or any general-purpose wallet is more flexible than the customer needs and less convenient than everyone wants. (And HT Express Pay is still more flexible and less convenient than the Starbucks payment app—HT lets you pick from among several cards, but you have to pick a card.)

Could Harris Teeter use HT Express Pay for something else eventually? Sure. But that's Harris Teeter's decision. And the ability to control not just the technology but the business purpose—and make the technology perform to the purpose, not the other way around—has to make this a lot more attractive.

It's not so much that retailers are control freaks—more that everyone else in payments is a control freak.

And when a retailer has a specific business purpose in mind, and control over how the technology will meet that business purpose, does that actually make it more likely that the POS will change? It works that way for Starbucks. And while lots of retailers like to point out that they're not Starbucks, it'll be interesting to see how well Harris Teeter's trial goes and what the grocer ends up doing with its own mobile wallet.

It'll also be that much harder for at least some of them to argue that they're not grocery stores.