The dedicated card acts as both a debit card and store credit card, offering 5% cashback on purchases and speedier checkout than a standard chip and Pin card.
With Wallet in the Target app, customers are able to pay using their Target REDcard, and combine it with savings from Target's Cartwheel offers and weekly ad coupons, through their smartphones.
In a press release, Target explained that its new Wallet allows for customers to pay and rake in discounts with Cartwheel all in a single transaction. Shoppers will also receive five percent back by using the Target REDcard, which can be pre-uploaded to the app. The timing of the launch, in the middle of the holiday season, couldn't be better - well, unless you're already done with your gift shopping.
But, as with Walmart and other retailers that still shun third-party digital wallets, this strategy may need to adjust accordingly if and when Apple and Android Pay scale to a point where they are the defacto preference for consumers.
Target's decision to join the mobile wallet club is a good one, albeit a little later than some others.
While Target continues to resist supporting Apple Pay in retail stores, despite an erroneous customer support tweet earlier this year, the company does support Apple's payment platform in-app for online orders.
Currently, Wallet is only open to those who have the Target REDcard, but the feature will roll out to non-cardholders soon. Eventually, customers will be able to store and redeem their Target GiftCards with Wallet also.