Target to launch mobile payment service in U.S. stores this year

A newly constructed Target store is shown in San Diego, California, U.S. May 17, 2016. REUTERS/Mike Blake/File Photo

CHICAGO (Reuters) - Target Corp TGT.N said on Tuesday it plans to launch its own mobile payment service this year in stores, which would allow customers to pay for goods using an app on their mobile phones.

The retailer did not specify the time of launch and a spokesman declined to give additional details. The Minneapolis-based company has about 1,800 stores, all in the United States.

Reuters first reported Target was building its own mobile payment service in December 2015. The retailer's entry would create a powerful new competitor in a small, crowded market, challenging Apple Inc's AAPL.O Apple Pay, Alphabet Inc's GOOGL.O Android Pay and Samsung Electronics Co Ltd's 005930.KS Samsung Pay.

Target's decision to introduce its mobile payment service follows rival Wal-Mart Stores Inc WMT.N which launched Wal-Mart Pay in December 2015.

Reporting by Nandita Bose in Chicago; Editing by Matthew Lewis