Dive Brief:

• Giant Eagle has started allowing customers to use PayPal and Venmo to pay for orders in its stores in a move the company says makes it the first U.S. grocery chain to accept the digital payment methods at cash registers.
• Shoppers can use the services, both of which are run by PayPal, at all 474 of Giant Eagle's supermarkets and GetGo convenience stores, according to a press release from Blackhawk Network, the payment solutions company that is managing the program for the retailer.
• ​Giant Eagle is adding the payment options to its checkout stations as signs point to growing consumer interest in using digital wallets, in part because of the emphasis on contactless shopping brought on by the pandemic.

Dive Insight:

A wide range of grocery stores and other retailers allow consumers to use PayPal for online purchases, but Giant Eagle is looking to stand out by also allowing people to use the service — and sister payment method Venmo — to check out in its brick-and-mortar locations.

PayPal Spokesperson Joseph Gallo declined to comment on whether the move is part of a company campaign to have its check-out technology inside more grocery stores.

PayPal previously rolled out the technology at retailers that include CVS, Foot Locker, and Nike, Gallo said by email. In addition, some 30 other merchants plan to do so, including Macy’s, Bloomingdales, Five Below, and Panda Express, he said. In total, about 1.3 million merchants are now using PayPal's QR codes in their stores.

To use money in their PayPal or Venmo accounts to make purchases at stores, customers use a mobile app to display and scan a QR code. Both systems enable shoppers to use their in-app account balances, linked credit or debit cards, or bank accounts as funding sources. 

The appeal of the services stems partly from people being able to receive funds from other parties digitally and then use the money to electronically pay for goods and services. Venmo is intended primarily to manage money transfers between people who know each other, while PayPal is designed to facilitate a wider range of transactions.

According to Blackhawk, 59% of consumers who participated in a survey it commissioned earlier this year have stepped up their use of digital wallets during the pandemic and 63% of respondents indicated they are more likely to shop at retailers that accept the digital payments they like to use.

Nonetheless, research from McKinsey & Company suggests that merchants face challenges in driving shopper adoption of digital payment methods in stores. According to a survey of almost 2,000 U.S. consumers the management consulting firm conducted in August 2020, nearly half have either not heard of contactless payment systems or are uninterested in them.

At the same time, more than three-quarters of people use some form of digital payment method, whether online or through a contactless method in stores, although the growth rate has slowed. In addition, 58% of consumers used two or more digital options to make payments in 2020, up from 45% in 2019, McKinsey found. 

In 2019, the grocer began a pilot in a Pittsburgh-area GetGo location of a camera-based system that allows customers to bypass checkout stations. The retailer moved beyond the testing stage last September, when it commercially deployed the technology, which was developed by Grabango.