Attention shoppers: a bevy of major retailers, including Walmart, Target, CVS, and Rite Aid have disabled payments via Apple Pay. By proxy, this also removes the customers’ ability to pay with Google Wallet or Softcard.
In public statements, Rite Aid said “We are continually evaluating various forms of mobile payment technologies, and are committed to offering convenient, reliable, and secure payment methods that meet the needs of our customers.” The other companies have said more or less the same.
Beneath the PR speak however, what the retailers haven’t let on is their involvement with Merchant Customer Exchange. In 2012, the aforementioned retailers plus fifty others forged a partnership with MCX to develop a new mobile payment system called CurrentC.
CurrentC, unlike Apple Pay, skips credit cards altogether and connects directly to users’ bank accounts. This is obviously advantageous to merchants as it allows them to avoid paying the 2% per charge that Visa and MasterCard charge. It’s likely that CurrentC will also collect users’ transaction data for targeted marketing purposes. Apple Pay specifically doesn’t do this, which has drawn ire even from retailers that do support it.
CurrentC also differs from Apple Pay in usage. Instead of tapping the phone to the NFC chip, users have to take a picture of a QR code with their phone’s camera, a process which is undoubtedly slower and less convenient.
Following the news of Apple Pay’s exile from major chains, there was an outcry from iPhone users on Twitter and other networks. Within a week, Apple Pay became the most-used mobile payment network in the US, and there’s a reason for that: it works. Though Google Wallet has had the same functionality for three years, it hasn’t seen widespread adoption, and frankly, Google is terrible at marketing it. When Apple Pay was announced, many hoped it would be the impetus that retailers needed to implement NFC payments on a large scale, a hope that seemed to be coming to fruition until last weekend. The biggest problem with mobile payments, argued Tim Cook during last month’s iPhone announcement, is that they’re built to serve their creators. Apple Pay took off so quickly because it’s user-friendly, easy to set up, and was marketed well by Apple.
CurrentC, rolling out next year in 110,000 locations, will fail for these same reasons. The actual method payment will turn off casual (non-geek) smartphone users because it doesn’t come close to the elegance of Apple Pay or Google Wallet. No one wants to use QR codes. And the security concerns raised by having it directly linked with users’ bank accounts will undoubtedly turn off the more savvy smartphone power users.
Though CurrentC seems DOA a year out, expect major retailers to relentlessly push it as an “easy” and “convenient” method of payment. Meanwhile, many proponents of NFC payments have been organizing boycotts against these retailers, which may cause actual change if enough people participate.
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