Why the Apple Pay War is doomed

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A war for mobile wallet dominance is on the horizon. Apple Pay. Photo: Jim Merithew/Cult of Mac
A war for mobile wallet dominance is brewing. Photo: Jim Merithew/Cult of Mac

Apple’s mission to replace your wallet with Apple Pay began just last week with support from more than 200,000 stores in the United States, but some merchants have already launched a war against the new payment platform.

Over the weekend, CVS and Rite Aid stores blocked Apple Pay access at their registers, marking the first counterattack in what will likely be a fierce battle to own your digital wallet. Apple Pay’s growth is unprecedented, but the anti-Apple Pay group is backed by a superhero-size team of retail megastores conspiring to make debit and credit card fees extinct. They’ll stop at nothing to see it happen, even it means hurting Apple (or themselves) in the process.

Here’s everything you need to know about the war on Apple Pay and why it’s doomed to fail.

These are just a few of the retailers fighting Apple Pay. Photo: MCX
These are just a few of the retailers fighting Apple Pay. Photo: MCX
Photo: Cult of Mac

Who is trying to block Apple Pay?

The Merchant Customer Exchange, aka MCX, a competing company that is developing its own mobile payments platform. The company is backed by stores such as Walmart, Target, Best Buy, Shell, Olive Garden, Lowes, Michaels, Old Navy, Southwest Airlines, Sears, Bed, Bath and Beyond and dozens of other companies that operate more than 110,000 U.S. retail stores. The participating companies, which as a group process more than $1 trillion in payments annually, have pledged to use CurrentC exclusively.

Why do they hate Apple Pay?

Because it doesn’t benefit them enough. Apple Pay is great for consumers, because it keeps your financial information private and makes shoppers harder to track. They also hate that Apple Pay still uses credit cards, which cost retailers between 1 percent and 5 percent on each transaction. They’ve created CurrentC as a way to cut out the middlemen by processing payments through Automatic Clearing Houses that charge lower rates.

Retailers reportedly had to pay a $250,000 to $500,000 upfront fee to join MCX, so they’re not eager to walk away just because Apple is coming onto their turf.

What is CurrentC?

currentC

CurrentC is MCX’s first mobile payments app that works on both iOS and Android. It’s available on both platforms right now, but you have get an invite to use it. Unlike Apple’s Passbook + Apple Pay solution, CurrentC can make payments and receive funds. It doesn’t work with credit cards, but it does store a lot of information about consumers to help merchants make more money off them.

CurrentC doesn’t send your financial data over the air, but all your important details are stored on your phone or MCX’s servers and can be shared with partners — unlike Apple Pay, which keeps your financial details in the secure element chip of your iPhone.

Is CurrentC better than Apple Pay?

Only if you want to use a payment process that’s more confusing than credit cards. CurrentC was developed with the wants and needs of retailers in mind, not consumers. Instead of using NFC like Apple Pay and Google Wallet, CurrentC utilizes QR codes, which makes using it pretty clunky. Just look at the steps below: It doesn’t take a genius to know which one customers will prefer.

How to use Current C:

Step 1: Tell cashier you’d like to pay with CurrentC.
Step 2: Unlock phone.
Step 3: Open CurrentC app.
Step 4: Hand phone to cashier.
Step 5: Scan cashier’s QR code.
Step 6: If scan doesn’t work, enter numeric code manually.

How to use Apple Pay:

Step 1: Hold iPhone to payment terminal while touching home button.
Step 2: There is no Step 2.

Can’t retailers support both?

timcook-applepay

Technically, they totally can, which is why iOS and Android fanboys are teaming up to boycott MCX stores. When pressed why they’re not supporting Apple Pay, Walmart responded: “Ultimately, what matters is that consumers have a payment option that is widely accepted, secure, and developed with their best interests in mind.”

Rite Aid’s reps claimed the pharmacy chain is “continually evaluating various forms of mobile payment technologies, and [is] committed to offering convenient, reliable, and secure payment methods that meet the needs of our customers.”

Neither of those statements addresses the issue, as Apple Pay fits their criteria for a mobile payment technologies better than CurrentC. You don’t need a special Apple Pay-certified terminal to use Apple’s mobile wallet. There are 220,000 NFC payment terminals across the United States that work with Apple Pay even if the merchant isn’t an official Apply Pay partner.

Part of the problem is that as merchants’ agreement with MCX, stipulates that they exclusively use CurrentC as their mobile wallet solution. MCX says there’s no fines if a retailer wants to leave the program, but won’t say if MCX partners get fined for accepting Apple Pay too.

Registers at CVS and Rite Aid stores used to support Apple Pay. In fact, CVS was the first store we successfully used Apple Pay at, but then the company got hostile over the weekend and blocked Apple Pay and Google Wallet from working at its registers. No official reason was given, but competitors like Walgreens have already started using the move against them.

So why do stores want to use an inferior payments platform?

GIF: Buster Hein/ Cult of Mac
GIF: Buster Hein/ Cult of Mac

It’s all about the Benjamins. Apple Pay does not feed merchants info about shoppers, whereas CurrentC tracks your previous purchases, discounts, coupons and loyalty programs, on top of your Social Security number, driver’s license, address, location and more. All that data is incredibly valuable to retailers trying to maximize profits, but not good for consumers who want to keep their info private.

Many of the MCX retail partners have signed agreements to use CurrentC exclusively for mobile payments, with many of those deals starting in 2015. Some retailers like Target can support Apple Pay in their iOS apps, but stores might be CurrentC only.

Apple Pay’s support of credit cards is also a sore spot for retailers who want to increase margins. Lee Scott, ex-CEO of Walmart and member of MCX, was asked why MCX would succeed. His response: “I don’t know that it will, and I don’t care. As long as Visa suffers.”

How can I join the boycott?

Educate your family and friends about how horrible CurrentC is for them. CurrentC’s fraud protection puts most of the liability on the customer instead of merchants, and considering that these are the very same companies that couldn’t keep your credit card info safe at their terminals (Hi, Target!), you probably don’t want to trust them with direct access to your bank account and other info, right?

Avoiding stores that don’t support Apple Pay isn’t very practical for everyone at this early stage in the mobile payments war, but you can send complaints to management. Here’s a list of the MCX partners’ contact info, in case you want to send a nastygram for not supporting Apple Pay.

Who’s going to win?

applepay2

You’d be crazy to bet against Apple Pay at this point. Tim Cook revealed last night that iPhone owners added 1 million credit cards to Apple Pay in the first 72 hours after the service’s launch. The response has been unprecedented and Visa and MasterCard have announced that Apple Pay already accounts for more mobile wallets than every other option combined.

The main reason why Apple Pay will win and CurrentC will fail is because it is what consumers want. We want something that’s easy to use and secure, without any extra hassles. Any company that drags its feet in supporting Apple Pay, or actively tries to block it, is just hurting its own business and losing the faith of customers. Companies that are members of MCX should take the Apple approach and ask if they’re creating the absolute best experience by supporting CurrentC. The obvious answer is no.

In the words of Tim Cook, “You are only relevant as a retailer or merchant if your customers love you.”

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  • Kevin

    Although I feel that there are a lot of people who are annoyed/mad/confused at the decisions of these companies to ban Apple Pay, I don’t think there are enough of those people willing to boycott the stores for there to be an timely response.

    These companies are stubborn. Much like Apple is (sometimes). They have had so much success that they can’t see past their own stupidity. In trying to save 1-5% they might lose 1-5% or more in business by refusing Apple Pay.

    This is the future. Especially for those who embrace technology. It’s only a matter of time until Apple Pay wins. But in that time, we, the consumer, will suffer.

    • boggy4062

      The more effective way is to load up your shopping cart with perishable and go to the cash register. If they refuse to accept Apple Pay OR Google pay… leave the store and the cart, so the staff has to deal with it. If this happens few dozen times in EVERY Walmart, or CVS or Target … they WILL connect the dots. Not only they will NOT make any money on you, but your every visit will COST THEM.

      BTW, Banks need to take these big vendors to court to recover hundreds of millions in card replacements every time their systems get hacked. I would NEVER use my debit card in a store these days. Giving direct access to your money is simply STUPID! Use credit cards only.

      • Nathan

        They will very likely just put it back on the shelf and not worry about whether it may have been sitting out for too long of a period.

      • boggy4062

        Yes, and it WILL take time and effort, the same way it take time an effort to drive to these chains and be faces with bullshit games that THEY started.

      • sssharpie

        This is “mobile payment terrorism”. You don’t really want to be that guy, do you?

      • boggy4062

        What terrorism? I just say… YOU DO NOT HAVE payment kinds that my wallet supports. Nothing else. It is them, who decided to keep ME hostage in their bullshit game with the banks, WHICH THEY WILL LOSE.

      • BusterH

        that’s a horrible idea. you’re just making retail staff do extra work. it’s not a policy that they can change.

      • John

        They aren’t doing ‘extra’ work, they are doing different work whilst they are paid for being there. Meanwhile they can’t do the work they would have originally done and the employer will notice. That said, making them put away the contents of your cart is such small scale that I’m not sure the bosses will click and think “It’s the Apple Pay vigilantes again”.
        And you’re also wasting your own time dong this intentionally for revenge.

      • boggy4062

        Yes, and the staff WILL give an appropriate “feed back” the to decision makers of these chains.

      • http://johndellaporta.blogspot.com JD825

        Retail staff in general are pretty sympathetic to The Cause, actually. I’ve become a regular at the RiteAid near my apartment and the cashiers and I joke now about how stupid the decision to shut off NFC was.

      • Kisai

        It will only cost the retailer if you load up your cart with bulk-bin purchases or deli items, they legally can not dump those things back into the bulk bins. And if you do this, you’re being a dick. (Do you know how many people stick their fingers into those bulk bins… yuck.)

        Just shop elsewhere unless you have no choice. If you want to make a big protest over it, waste at least 5 minutes of the cashiers time so that it sinks their metrics unless they call over a supervisor. Cashiers will (rightfully) protest to their mangement/union representatives that the only way they will get better metrics is by accepting Apple Pay, not trying to upsell people with hideously slow CurrentC.

        Incidentally, the entire metrics angle does mean something. When companies decide to make their front end staff upsell products that the customers don’t want, metrics go down across the board, and the people running that store are then in trouble from their regional management.

        Apple Pay/Google Wallet users are better off shopping from those merchants that support it (eg McDonalds instead of Wendys, Walgreens instead of CVS) and reduce their exposure to retailers that use insecure payment options.

      • boggy4062

        Sure I am, but so is disabling NFC readers. One dick behavior invites another…. and this is the entire point, that I was trying to make. One of the rules of business is EASE OF DOING BUSINESS. For some reason dicks at Walmart, Target and other retailers don’t get it. They don’t harm banks, they harm and piss off their own customers, and keep them hostage. I have no problem in making sure what I think about it , and how I can retaliate, quite peacefully.

  • Lucas Guimaraes

    Isn’t Meijer on the Apple Pay page as a retailer that DOES accept it?

    • Joel

      Meijer accepts it. I got gas there this weekend. First time I’ve ever used NFC payments. So easy. I would hate to lose that ability. I’ve dealt with enough credit card fraud over the years. Finally something more secure and easy. Easier than any other payment I’ve ever made.

  • Steven

    Here’s an idea if you find yourself in a place that doesn’t take Apple Pay but does accept CC (and you can’t just leave): pull out the paper checkbook and do it old school. Be sure to hold up the line as you search every pocket for that wallet and ID that you know have gotta be around here somewhere!

    Seriously, it’s one thing to offer a competing service that also benefits the user. But turning my every purchase into a quasi-Facebook data mining operation is not going to cut it. I live in a smaller town and have only been able to use Apple Pay at Pannera twice, but the simplicity is astounding. Get on board, retailers.

    • Tim LeVier

      Checks are cheaper for the retailer – no credit card fee – which is really a component of this and sometimes the retailers have stopped taking checks. My alternative? Keep my physical card that is also loaded onto Apple Pay, but damage the magnetic strip so it won’t read. Manual entry of credit cards is a “card not present” transaction and comes at a higher CC fee – and takes more time, which is what you were looking to accomplish with the checkbook.

      Of course – you might be shooting yourself in the foot if you are in a hurry and just wanted to swipe the card. Perhaps having a back-up duplicate card in good working order for those times? A damaged one when you want to be “high and mighty”? and NFC Mobile Wallet when you want to reward good behavior.

      • FenTigger

        Not sure checks are cheaper for then retailer when you take all the end to end handling costs, plus the delay between the goods being taken by the customer and receiving payment from the bank and checks that don’t clear (I’m British and I’m aware the US has different laws on checks/ cheques than we do, but don’t really understand the detail, plus it probably varies from state to state).

  • TJ Prescott

    Most misleading headline ever.

    • James Alexander

      I know I had to take a second look. I thought he was saying Apple Pay was going to fail.

    • BusterH

      apologies. tweaked it a bit for clarity.

  • http://danbradleydesign.com dbDESIGN

    That is unfortunately how the United States works, the banks rule the world, and if it hurts the banking system or big corporations are at threat of losing money it’ll fail.

    I hope apple does succeed with this payment system, though!

    • AJ5790

      Dude, the banks are on board, it’s the merchants who are throwing the roadblocks.

    • Windlasher

      Have ya been reading the articles? The banks LOVE IT. The (certain) merchants don’t.

      • http://danbradleydesign.com dbDESIGN

        Something going on there brother, and you’d be foolish to think it’s not coming from a higher level beyond the merchants.

      • Mike P

        The U.S caught an alien from outer space and they are hiding it too. LOL

  • David

    I don’t mind businesses chasing better margins. If I owened a business that’s what I would look to do. With regards to picking sides; I don’t care to pad Walmart’s pockets any more than I wish to pad Visa’s. So a boycott of the businesses that don’t support Apple Pay is trivial to me as Apple Pay is still supporting the transaction fees of Visa/etc.

    If anything, Im for cutting out the middleman who charges businesses 1-5% per transaction, and splitting the savings between consumers and merchants. There is value added in that end game.

    • Dutchman

      Agreed! Lets get more competition in this market space – the consumer will always win, then. Demand both be supported!! Apple does not love you – it a billion dollar corporation making computers in China paying horrific wages. Yes, they are arguably the best in the biz – but don’t be suckered by these marketing groups like Cult Of Mac – they make money off of fanboys, and will tell you anything to make you happy. Make them compete everyday for our money…

      • Windlasher

        Apple doesn’t pay anyone in China anything. Apple contracts with a supplier/manufacturer who can pay whatever the government lets them get away with. That said and as someone who has actually spent time in China, Just try to take away those jobs and their horrific wages,. The workers will revolt like never before.

      • BusterH

        1. Cult of Mac isn’t a “marketing group.”
        2. I’m not saying CurrentC and other competition shouldn’t be on the market. I pledge allegiance to The Open Market. Long may she reign. But CurrentC is so horrible no one should use it. It should be shamed out of existence by consumers, while Apple Pay, Google Wallet and other options fight for first, and I think that’s exactly what will happen.

      • Whocares

        You’re fking idiot. Apple doesn’t pay Foxconn workers. You’re just a troll in this thread who’s not using your brain when posting that idiotic message.

    • JP

      If you want to cut out the middle man, then be prepared to cut out credit. Americans can’t live without perpetual debt. Retailers know better and will ultimately lose this battle. If they thought they could win, they would have just stopped accepting visa/mc purchases as well. Because they aren’t, I take this as not a hit on the CC companies, but to my personal vested interest which is privacy and maybe convenience at some point. This is an attack on the consumer to ultimately line retailers pockets. And I’m not about trading the evil I know for the one I don’t at this point.

    • Whocares

      Let me ask you a question: Why did people use Credit Card instead of Debit Card? The answer is Delay the Payment. If given a choice to buy something and not to pay in 30-50 days, I would do that and this is what using CC is more beneficial. On top of that, Cash Back, Rebate and other perks come with using CC. For Debit, it’s an electronic cash since it takes money out of your bank accounts right away.
      No one want the merchant to have direct access to their bank account…Do you? I’d rather use Apple Pay or Google Wallet or Cash, not MCX, ever.

      • Nathan Guidry

        I guess you don’t have Auto Pay enabled on any bills you pay then? Don’t write a check…EVER, because that has your info and bank info on it.

        Retailers are trying to get away from the 2-5% “royalty” payment per transaction. If you were a business owner, you’d want the same thing. Why should you pay 2-5% royalty per transaction just because a customer used a credit card instead of cash?

      • David

        Hey mr. whocares,

        to answer your question. I agree, mostly. I use a CC when my bank account balance is too low and i still want/need to make a purchase.

        maybe i’m naive, but i don’t think there is inherently higher risk with using a debit card over a credit card. At least it’s never been behind my motivation in the past. Suppose if my bank account was lifted from debit card usage i’d have a different opinion, but my experience tells me the risk is pretty low.

        I personally prefer to pay via check-debit. My gf’s family… they are huge fans of CC perks. They don’t really attract me, and in the end, I’d rather avoid paying any unnecessary interest.

    • Chuck

      I completely agree. Its hard for me to fault the merchants for trying to save money when they are being gouged by interchange fees. This is why I don’t understand why Apple Pay doesn’t provide an eCheck payment option. It wouldn’t charge merchants interchange and can be processed faster. Merchants would receive funds faster than even card payments.

      • David

        I imagine it was the only way Visa, MasterCard, and Amex would agree. Maybe after enough people sign up Apple can flip the scrip and go without them and be the hero of both consumers and merchants. Or at least add a checking acct option to their chagrin.

  • northernpenguin

    While I am in Canada and thus not able to use Apple Pay yet, I will share this. We have had NFC MasterCard and VISA terminals for a few years now and it has altered my shopping habits – this is without a phone, or Apple or Google.

    The major gas stations in Ontario are Petro Canada (Official Mastercard “PayPass” partner), Shell and Esso. Esso has an NFC option but you have to sign up for their stupid dongle rather than tap your existing credit card. Shell it’s all chip-and-pin no tap to pay. During the summer I’ll *tend* to go to Petro Canada for the NFC tap goodness and occasionally the other two. In the winter, when I am presented with the remove-gloves-insert-card-wait-wait-wait-enter-pin-wait-wait-enter-auth-amount-wait-would-you-like-a-car-wash….. yeah in -30C I go to tap-wait-pump Petro Canada. Every time.

    Am I boycotting Wal Mart? Nope. The amount I spend on groceries and stores like WalMart is typically above the NFC limit my bank established. But all the little guys – yeah they noticed. I switched to Starbucks for my morning coffee, initially because Tim Horton’s couldn’t possibly have botched their NFC roll out if that was a design spec for the process. Now they are fine and support NFC properly but I’ve become used to collecting reward stars over at the mermaid’s shops.

    I get annoyed when NFC is not supported at a retailer. Big time. I get VERY annoyed when I have to hand my card over to the cashier because I know that’s when most card skimming attacks occur. I will switch to paying cash before I grant a retailer access to my chequing account – I won’t even use the Interac NFC system that does that here but mainly due to the consumer hostile fees that entails.

    QR Code doesn’t bother me per se, heck my Starbucks card is a bar code in Passbook but the CurrentC implementation sounds like something I would avoid.

    • Chuck

      The Current C app will work exactly like Starbucks. This article made it sound worse.

      • tralalalalalala37

        ha, starbucks has my ss # then? ha

      • northernpenguin

        My comment was more aimed at the stores removing NFC. At the same time I can’t see CurrentC working for “Pay at the pump” type applications based on the article description but I can see a red scanning laser at a Shell pump, sure. I would likely use something like that. I use the PebbleBucks app on my Pebble to show my SBUX barcode in the drive thru lane all the time.

        But also CurrentC is different from SBUX in one significant way. SBUX is tied to my VISA, not my chequing account, which is a much nicer dispute process for me the customer if something goes wrong. It is a rare thing for me to use my debit card anywhere due to card cloning and such. With VISA/MasterCard the problem transactions go away with a phone call (merchant gets a chargeback). With Chequing account problem transactions can be affecting my cash flow for months while I argue to get my money back.

  • Tim LeVier

    What we really need is a hack. A lightning port / micro usb port dongle that can translate the mobile wallet on the phone to a swipe device. By turning off the NFC, they’ve just disabled an input method. The workaround is to match the input method of other accepted payments. What will they do, disable all payment methods that swipe? Alas, that *might* work for the android crowd, but with Apple Pay being tucked away – not sure it could be done.

  • Daniel J. Margrave

    I’ve read two different Jim Edwards pieces over at Business Insider (Yes, I know, We Hate Apple For Some Reason Insider) . . . why is this a “war” at all? It’s not the paying experience that’s the problem. Having said that, I’m itching to try ApplePay at the Walgreens or Target . . . If there’s a war at all, it seems like it is on the consumer, not on Apple. I wonder if the CDC or the American Psychological Association has pinned down the Apple Hate/Doom Dissociative Disorder just yet. As a consumer, I’m going to opt for what’s easiest and most convenient to me. And I’m not handing my phone to anyone, so MCX ConsumerC QCodes are out.

    • Chuck

      You don’t have to hand your phone to anyone. The article painted a worse picture. You can hold your phone while it’s scanned.

  • tjwolf

    Don’t throw out the baby with the bath water by boycotting every member on that MCX list. So far, as far as I know, only CVS and Rite Aid are refusing to take Apple Pay. My very first Apple Pay purchase was with Shop Rite – an MCX member. My second was at Target – another. Wasn’t Target even mentioned as an Apple Pay partner in Apple’s announcement?

    • emcampbe

      Target is an online Apple Pay partner, but I don’t believe they are in-store. So far as I can see at two of my local Target stores, they have the new CC readers that are NFC-capable, but haven’t turned that functionality on at all – the screen only says you can swipe, and when I asked about NFC/tap, they had no idea what the heck I was talking about. In my mind, a different thing, since they didn’t specifically turn it off – but never had it on in the first place.

      • tjwolf

        Hm, you may be right – the Target Apple Pay purchase was through their app. But Shop Rite (my local grocery chain here in NJ) definitely accepted Apple Pay in the store – and their logo is displayed prominently in the MCX member list above.

  • Greg & Rose

    I do honestly wonder how the rest of the World will go with implementing Apple Pay – very well I think!

    In Australia for example, (like Europe) we’ve had this system for years, & it’s fair to say NFC tap to go (Paypass/Paywave) is just about everywhere. If major retailers tried to block it NOW – Lord help them!

    • northernpenguin

      Same situation here in Canada. Shut off Paypass/Paywave/Interac Flash at your own peril.

  • Joe

    Give those companies my SSN? No way! Not having the choice to pay by credit card? No way! – I can get along fine without any of these greedy merchants and millions of people can too.

    • Nathan Guidry

      Where did you read you had to give them your SSN?

      I have a Target Red Card and I didn’t have to give them my SSN. Red Card is pretty much the same thing as CurrentC in that you link your checking account to the retailer’s card. By doing so, when you swipe their card, it just debits your checking account, however, they do give you a 5% off purchase reward for doing that.

      • tjwolf

        So you feel comfortable giving Target your bank account information – even after they got hacked? Brave man. Oh, and today CurrentC was hacked – before it even went into production and after the CEO blathered on about how safe its customers’ data is in their “cloud”.

      • Nathan Guidry

        My information wasn’t hacked. Are you comfortable with PayPal? Are you comfortable with any site that you do online payments with? Are you comfortable writing a check? How about handing your credit card to a server at a restaurant?

      • tjwolf

        PayPal – no, I’m not comfortable giving them my bank account number.

        Any online site I do online payment with – what do you mean? Of course I feel comfortable paying with credit card online – because I’m not liable for fraudulent charges to it, should the card data get stolen. No, I do not give any online entity my bank account information.

        Writing a check – not sure what I’m supposed to feel uncomfortable with here. Maybe you can enlighten me.

        Credit card use (whether to waitress or not) – as I mentioned above, you’re not liable for fraudulent use of a credit card.

        Who do you ask for your money back if a hacker sucks your bank account dry? Certainly not the bank. Certainly not the MCX group whose server got hacked.

        Along the same lines (and more realistic): what do you do in case of “accidental” withdrawals. When I was young (and more naive), I gave my mortgage company my bank account info so they could withdraw the amount automatically every month (in exchange I got a small break on interest rates). Well, one month, they accidentally withdrew TWO payments. By the time the problem was noticed, I had written a “rubber” check and had to pay a penalty. The mortgage company gave back the erroneous withdrawal – but didn’t pay my overdraft penalty.

        What if your MCX merchant tells you the price of something is X and later you find out that you got charged X+Y. How do you challenge them? They already took X+Y out of your bank account. This is one of the prime benefits of using a credit card – you have someone else (the credit card company) on your side.

      • Nathan Guidry

        All the information you’d use for CurrentC is on your check. Name, Address, Bank Routing Number and Account Number.

        I don’t get your MCX if price is X and they charge you X+Y, you’re in the same boat with ANY payment, other than cash, system.

        Banks do the same fraud protection as credit card companies.

        You’re not comfortable with PayPal, yet you’ll put your CC information in Apple Pay/Google Wallet???

        As far as I know, Mortgages, Student and Auto Loans require your bank routing and account number to do online payment and auto pay. At least that’s the way it is for my Mortgage and Student Loan lenders.

        The hacks done against Target and Home Depot only got people’s email addresses and NO financial information. I think you’re paranoid about the wrong thing.

      • tjwolf

        I think CurrentC requires date of birth and, possibly, my drivers license number. Neither is required on the checks I write. But even if they were truly the same information, with a check I always have to give my explicit consent – via a signature – whereas with CurrentC (and any other establishment that have your checking/routing info) the company can withdraw money from your account without your explicit consent (you give them indefinite access by signing a contract a priori). The company isn’t supposed to take money except for the amounts of your purchase, but – as my mortgage company example shows – mistakes can happen.

        Sorry about my convoluted example using $X and $Y. I was just trying to point out that if you have a dispute with a merchant over something you bought – perhaps you found, when you got home, that the item was damaged, but the merchant thinks you damaged it – it is up to you to settle this with the merchant. If you had purchased the item with a credit card, you could simply refute the charge at the end of the month. The credit card company would settle the dispute on your behalf.

        Not sure what your point was in re-hashing what I already stated: of course, mortgages need your bank account #/routing information to do auto-pay. My point was that sometimes these companies make mistakes. In my case, they withdrew way too much (by accident), causing other checks I had written to other folks bounce (i.e. my account had insufficient funds when the checks were cashed). My bank charged me an overdraft fee – even though it was the mortgage company’s fault that my account had insufficient funds!

        Yes, I’m not comfortable with PayPal but am comfortable with Apple Pay (don’t know enough about Google Wallet) – because I DON’T PUT MY CC INFORMATION IN APPLE PAY! I don’t know where you got the idea that Apple Pay keeps CC info. It doesn’t.

        You’re completely wrong with regards to the Target hack. As a matter of fact, millions of credit card numbers were stolen. Not only that, even encrypted PIN numbers were taken. Here’s a news article from the time: http://www.theverge.com/2013/12/27/5248108/target-confirms-encrypted-debit-pin-data-stolen-during-hack

      • Chuck

        Your not giving your bank account information to merchants. ApplePay and CurrentC are similar in that regard.

      • tjwolf

        I did not say that with CurrentC the merchant gets my bank account information. But the bank information certainly gets housed on the “CurrentC” servers. And this is nothing at all like Apple Pay. CurrentC servers can be hacked (as was already done apparently – see news today), with Apple Pay, there’s no server to hack. And there’s no iPhone to hack either as the information on the device is merely a device-specific account number provided by the CC issuing bank and put into the phone’s secure element (on-chip memory that can’t be read by software – i.e. hack proof) when the credit card is registered on the phone.

      • Chuck

        How do you know how CurrentC will function? Can you provide a link. I’ve been trying to research that.

      • tjwolf

        TechCrunch has a good description: http://techcrunch.com/2014/10/25/currentc/

        On that page, there’s also a link to the system MCX licensed. Here’s the eventual page that describes the workflow: https://www.javelinstrategy.com/blog/2014/02/12/mcx-and-paydiant-mobile-wallet-and-capturing-the-consumer/

        Hope this helps.

  • Nathan

    Consumers no longer shopping at stores will get results. Unfortunately, like many things, most people are only willing to complain online and say they’re going to boycott but really don’t.

    Would I prefer if they’d all accept it instead of choosing sides? Certainly. But just as businesses have done for at least a decade, there will be sides. Many businesses still only accept cash or cash and debit. Some only accept Visa and not MasterCard or vice versa. Many in Canada don’t accept American Express.

    • Windlasher

      Agreed: People complain about things like ATM fees but continue to use them. If the average person took out enough money for the entire week at the beginning of the week instead of 20 here and 20 there, the banks would have a cow.

  • emcampbe

    I feel like this is the beta/VHS war of the mid-2010s.

    As for me, I don’t have an iPhone 6 (yet), however, don’t see where CurrentC thinks they can win this…the technology they are using is already out of style. How they got retailers to buy into this is beyond me. In addition to all the upfront costs, they now need to get a QR code scanner to run this gamut, instead of the new CC-reading equipment that they need to get anyway. How secure is a QR code going to be, anyway.

    And yeah, I really want to give my bank account info., SSN and DL details to an new, untrusted company, who will put it onto some cloud somewhere. Seriously…given all the retailer hacks in the last couple of years, it seems like its a good way to get my account broken into…much worse than a CC account number, in my opinion. I doubt there are people lining up to do that.

    And yeah, with a bank account being used (and not even a debit card), there is no consumer protection like with credit cards (nor any of the other benefits…extended warranty, rewards, etc. included).

    I’m not touching this with a 10-foot pole, and suspect this CurrentC scheme won’t last too long… a few months to a year at most. Almost feel sorry for the retailers that signed up…they’re going to lose a ton on this.

    • Nathan Guidry

      Um, the scanners at WalMart and pretty much all retail stores can read QR codes as well as UPC bar codes.

      Have you ever written a check to purchase items at one of those stores? If you have, you gave them the same information you’d use for CurrentC. A check has your name, address, bank routing number and bank account number on it.

    • Chuck

      QR and NFC aren’t for “style”. They are just different methods of triggering a transaction. MCX is an easy sell to merchants because it does not require new hardware. The scanners they use today would scan the QR codes ur phone displays. MCX also circumvents interchange fees. Something ApplePay could do if they offering an eCheck payment option.

      • emcampbe

        Sorry, but any retailer taking credit cards require new hardware anyway to support chip cards – a transition that’s going on now. Banks will not accept liability for purchases fraudulently made at retailer terminals after Oct. of next year unless they are chip-enabled. So its going on anyway, Getting a version that accepts NFC costs very little extra, and many are getting these versions anyway (though some retailers aren’t turning them on…or in some cases, did, and then turned them off). In my opinion, I’m not convinced of the security benefits of especially the US implementation of chip cards, since it doesn’t require a PIN like everywhere else. But that’s probably a different topic.

        As for circumventing interchange fees – yes, MCX would do that. Since it is not using a credit card, its using my bank account. But then I’d need to keep close tabs on my bank account to make sure I’m not overdrawing when I make a purchase (one of the reasons I rarely use debit cards, either), as well as having my real account number stored on a server that apparently was already hacked. The credit card I use provides me protection if my card is fraudulantly used – what kind of protection will I have if MCXs server gets hacked again? Yes, that would be my responsibility – something I don’t want responsibility for.

        If businesses want the extra business that comes with accepting credit card payments, then they should accept it as a cost of doing business. Since they already incorporate those costs, much like they incorporate distribution and overhead when they price their products, and are unlikely to lower them once MCX is out, consumers aren’t going to get any benefits. The best option for both the consumer and retailer is going to be to accept a variety of forms of payment and let the consumer decide what is the best form of payment for them for that transaction – be it cash, credit card, mobile payment (Apple Pay, Google Wallet, etc.), MCX, etc.

  • aardman

    One primetime ad by Apple that lays out all the information MCX collects and stores (your SSN, bank account no., address, purchase history, etc.) and compares it to the information ApplePay collects and stores (none) will send MCX to the bottom faster than a U-Boat getting depth-charged by a squadron of destroyers.

  • Jacob

    Am I the only person that still uses cash?

    • Superkonna

      Yes. Well, criminals aside.

    • David

      haha, sorry I actually laughed. please don’t feel insulted … you just might be in the minority. I might carry a couple bucks on my now and then but most (if not all) of my weekly transactions occur via card.

  • HowmaNoid

    Walmart is full of it. They only ever do things that serve their own best interests. They are single handily responsible for sending millions of American jobs overseas with the way they dictate to suppliers what super low price they will pay for the goods they sell.

    • Capt Obvious

      Absolutely, this whole MCX thing is being perpetrated by WaMart to stick it to the card brands…… they won’t win…..

    • emcampbe

      Wal Mart, from a recent quote, seems to want to stick it to Visa (and presumably, MC, etc.) and their % fees more than anything.

      I say if that’s what they really want to do – they should. Simply stop accepting credit cards for purchases. And see how fast they lose the title of world’s largest retailer. But that’ll allow them to show Visa/MC.

      • Chuck

        Everyone should be for lower interchange fees. Those costs are passed on to consumers. Think about the next time you go into a convenient store and you see a sign that says “$10 minimum for card purchases”.

      • emcampbe

        They are already passed onto consumers because they are built into the prices. There’s a reason gas is cheaper at ARCO stations (which doesn’t accept credit cards) and why you could commonly find gas at cash vs. credit prices (hard to do now, as many states made this illegal.

        Do you think even if, say, CVS stopped taking credit cards tomorrow, they would lower their prices 2-5%. Doubtful – they’d likely be like the airlines who don’t reduce prices when their biggest expense, oil, drops in price. So the corporate will get richer, while the consumer gets nothing in return except for losing choice in how they pay. Kind of like CVS/Rite-Aid is doing now.

  • AJPME

    Surely you must be kidding. I’ll probably eventually go to stores that use Apple Pay and not shop at those that don’t. I like the security and not allowing others to know much about me. My “boycott” would eventually be those vendors that don’t use Apple Pay.

    But hey, write whatever about whatever.

  • Chris Russell

    Apple and Google should simply remove CurrentC from the App Store & Google Play store.

    • Nathan Guidry

      Android users can just get it from the Amazon App store.

      • Chuck

        And that’s another limitation of ApplePay. You need an iPhone to use it. How are they going to dominate the mobile payment industry when Android has a bigger market share.

  • Brian williams

    This is the VHS vs. Betamax fight all over again. There will be only one winner. There is no way in hell I will use CurrenC, it’s too complicated and time consuming, not to mention the fact of how insecure it is. There is going to be a lot of money lost when someone hacks into the CurrenC system and gets ahold of all that info.

  • http://heguy.tumblr.com Kuhnaydeein

    “There are 220,000 NFC payment terminals across the United States that work with Apple Pay even if the merchant isn’t an official Apply Pay partner.”

    • Kisai

      And just about everywhere outside the US already has chip+pin and NFC, while exactly zero have CurrentC. Nobody outside the US can signup for CurrentC either.

      • FenTigger

        But that doesn’t mean that, say, European retailers aren’t going to go down a similar path and (try to) devise an alternative. Then again UK retailers, especially the supermarkets, are already tracking our purchasing with loyalty schemes (e.g. Tesco Clubcard, Nectar) so maybe there’s no need to oppose it.

      • Chuck

        CurrentC hasn’t launched yet and when it does any merchant will be able to accept it because there are no hardware requirements.

    • David

      For perspective, there are over 9 million retailers nationwide. Its a start, but even Apple has a ways to go with this one.

  • Dominic

    Too bad Apple Pay is implemented on top of an obsolete payment vehicle: credit cards, which charge consumers a 20% interest rate. There are already better mobile payment systems like MPesa, that don’t use credit cards, they are based on credit, for example you put aside $200 for shopping from your bank account. Every time you purchase something, the amount is substracted from the initial credit of $200. These systems also support small payments, sub-dollar payments.

    • Greg & Rose

      In Australia, the vast majority of people use a Debit Card with Paypass (etc) Terminals. Two words: Visa Debit.

      Surely it can be the same in the U.S. ??

      • David

        I think Apple Pay works via Paypass terminals at registers? no? At least PCmag ran an article saying as much a couple days ago.

    • imronburgundy

      I use my debit card with it.

  • Marty

    Good article and insights. Is there any hope that the interchange fees will go down or be diminished through Apple Pay ? Though the 3 % seems meaningless to consumers, the cost can be staggering to low margin operations. That is 3 % off of profits every time. Additionally, there may be a swipe fee in addition to the % so if a consumer makes a partial payment and an additional payment at the completion of the service (i.e. when the product is delivered) then there are two swipe fees to contend with.

    • Chuck

      Apple could make a huge difference by allowing an echeck option. It seems like an obvious solution. Don’t understand what the hold up is.

  • synthmeister

    I believe that the MCX consortium is forgetting one thing–there is absolutely nothing preventing Apple (or Google) from deleting the CurrentC app from their stores. And right now they have ZERO leverage, i.e. Apple could simply “delay” the app for “technical reasons” and throw a huge monkey wrench into their rollout plans.

    The MCX consortium seems to be completely dependent on the Apple/Google ecosystems.

    Or maybe just take a 30% cut from the transaction fees? ;-}

    • Nathan Guidry

      Amazon App store will have it. So Android users are still good to go.

      If Apple did that, I think it would be a huge PR nightmare for them.

  • dcj001

    “Why the Apple Pay War is doomed”

    The war is doomed?

  • Killeroy

    If the retailers do away with credit cards through apple pay, next it will be the credit cards. Now I guess they do not realize not everyone can buy a 3000.00 dollar tv or refrigerator with cash. So if you only take money from a connected bank account you will loose allot of business for high dollar items. Talk about shooting yourself in the foot.

  • Freethinking_Jeremy

    I’m betting the eventual winner is actually going to be Google. Apple is too greedy to play nice with the stores. And this retailer coalition has enough clout to block Apple Pay successfully, but not enough savvy to create a decent solution of their own.

    Google is more likely to offer a better deal to the stores (if they’re not already). And Google and the retailer coalition can beat Apple Pay just as Google and all the other manufactures beat iPhone (except Apple Pay will be easier to beat because it’s behind Google rather than ahead as Apple was with the iPhone).

    But in the event that Apple Pay succeeds and popularizes NFC payments, then Google, with a much larger user base, can swoop in and take over. Actually, it would probably take over without any swooping required.

  • Capt Obvious

    At the end of the day, the customer will vote with their “wallet”…it doesn’t matter if WalMart wants to stick it to Visa, if the customer wants Visa, or Apple Pay, or whatever alternative payment scheme is out there, they will vote for it with their wallet. This whole MCX thing is doomed to failure, if you ask me, and WalMart should get a grip.

    • emcampbe

      Wal Mart talks a good game, perhaps, but if they really want to stick it to Visa (much like they stick it to their suppliers/workers…but that’s another topic), they should. As I said above, if they don’t want to pay the interchange fees, they should simply just not accept credit cards. And see how their business does after that.

      They can talk about how they don’t want to pay interchange fees, but they are, these days, a part of the cost of doing business, especially for large retailers. If they don’t like the game, they should simply stop playing. Maybe MCX is their way of doing this?

  • bamboobob

    How can Apple pay be ALL POWERFUL if more people have Android phones?

    • tralalalalalala37

      Most people have open source android phones (94%) not google play android phones (6%). In the US only random android phones have NFC so the consumer doesn’t know that it works.

  • Tilghman Lesher

    “Who will win?”

    The answer is neither. Visa (and Mastercard and other cards) wins, because they remain a universal method of payment. CurrentC won’t win because it’s clunky. Apple Pay won’t win, because it’s neither universally on phones, nor universally accepted. Yes, people love NFC payments, but if they universally have to carry around a Visa in order to ensure they can pay, why bother with an option that doesn’t work everywhere?

  • Nathan Guidry

    If you want Apple Pay and Google Wallet to be more accepted, boycott Visa, Mastercard, Discover and AmEx, until they drop the 2-5% fee per transaction they charge retailers.

    I hope you all realize how much double dipping credit card companies are doing by charging 2-5% up front from the vendor for a purchase and than 15-20% on the back end through interest rates on the consumer.

  • Jesse Supaman Nichols

    I am updating this site with a list of retailers refusing NFC payments for their own selfish reasonings, as well as alternative places to shop! http://boycott-mcx.com

  • Chuck

    Why doesn’t Apple just offer merchants a no interchange payment solution within their Apple Pay?

  • Philip Coates

    Yeah, but Buster, you have to have an apple device…and with you…to use Apple Pay.

  • Glint_Westwood

    My Ole Bessie is as stubborn as the retailers…She’ll wait until they come to their senses…In the meantime, she’s loving the hoof print pay option…

  • Wake Up People

    Am I the only one that feels like this is a witch hunt? I.e., any heretic who dares mention the other options aside from Apple’s is going to get the typical iFan brow beating that has become so stomach turning for the rest of us? And people in the comments saying “if a store doesn’t take Apple Pay, walk out like a petulant child and leave your full cart for them to put back” …I look forward to the day that cell phones are not topics of religious fanaticism (and lets face it, there are some Android people like this too) but are just that thing that everyone has in their wallet so this nonsense can stop…

  • Frank G

    Whatever happened with paying cash for items?

    • EKIMMMMM

      stupid. shut up.

    • Marty

      The government would love to see cash go away completely. There would be fewer transactions escaping people dodging taxes

  • Billy Baroo

    “Must worship Apple, must….”
    What the hell makes you idiots think any one of these trillion$ playas has your best interest in mind. You will have a cc in your wallet for years to come, whether you whip out it or a phone app makes little difference. Hackas gonna hack-

  • Joe Tavormina

    For years Ifans have been dumping on NFC, as a payment system. IOS7 ibeacons was supposed to kill NFC. Now all of a sudden, Ifans support the NFC payment system that was introduced by Google in 2011. Was Google right and Apple wrong? Is this bizzaro world? IFans welcome to 2012.

  • Dave S

    I am an android guy through and through. I have been using Google wallet for years and generally don’t like apple products or the company in general. To each their own. However, I’m not blind to fact that applepay is going to help move the NFC payments into the main stream, and for that reason, I love it. Where applepay is accepted, so is Google wallet. More and more companies (finally) getting on the NFC bandwagon is good for all of us, no matter who made your device. But this currentc is bad for everyone. Its clunky, un-intuitive, multi step, and a personal info whore. I hope it dies quickly and NFC becomes the new standard in mobile payments in the USA like it has in the rest of the freaking world.

  • Deb

    I think boycotting will get the point across over time but to strengthen the effect we need to show massive support to the companies that are embracing Apple Pay so their stubborn competitors can watch their profits grow. They could not have picked a better season – heck I can plan most of my Christmas list around supporting Apple Pay.

  • Rylen

    Can’t Apple and Google just play the same game MCX is playing? Can’t Apple and Google just pull CurrentC off their app stores for good?

    Boom “Payment War” over.

  • PeterBlood

    And that ungodly alliance is starting to crumble already with enormous backlash against MCX and the security breaches at MCX taking testers (users) information. This is over almost before it started. And retailers are starting to waffle in the face of it. In the end Apple Pay will emerge triumphant but not after a lot of customers have been ticked off by the companies doing wrong by them and only right by themselves. Doing right by the customer ultimately is really doing right for themselves.

    I do believe this sort of security and desire for privacy will only increase as we’ve all gotten a taste of greedy companies trying to capitalize on our user data. Data mining business models by the likes of Google or Facebook will not stand for long.

  • Nathanael
  • AbeusRex
  • Syndrome666

    The funny thing is, you can use your debit card or direct bank account if you prefer in Google wallet with NFC pay, it’s not credit card only payment option as every post seems to stress about tap and pay. MCX is seriously the most idiotic invention at this point. I’m sure apple pay works similarly to Google wallet and supports debit cards as well as bank accounts, and I can say for a fact that Google wallet does support loyalty cards as well. Honestly there is zero reasons for mcx to exist, other than maybe add an option to customers with old phones that don’t have an NFC chip built in. Even then, I’d rather use plastic or cash over mcx

  • Oscar Cavail

    Apple Pay empowers the credit card industry. It’s that simple. And using your credit card is already an insured transaction so using Apple Pay on the basis of “added security” is total nonsense. 9 in 10 Iphone users can’t use Apple Pay and worse still, most retailers have absolutely ZERO motivation to spend more on registers capable of accepting Apple Pay or GW. You are NOT going to spend more simply because they are offering Apple Pay as a check out option. So retailers continue paying these absurd interchange fees, have to increases their costs which of course they pass onto you the buyers, and half the smartphone market due to the popularity of Samsung, LG, Motorola, Nexus, HTC phones will never have any use whatsoever for Apple Pay. Nevermind the unlikely event that a majority of the places you currently use your credit card all start accepting Apple Pay. Meanwhile you got no discount for going along with Apple’s and the Credit Card companies’ game plan to skim more revenue off retailers.

    And if you use CurrenC, simply set up a second account linked to your primary checking account. Transfer a small amount to it via your smartphone.Enjoy the discounts but not if it means sharing your driver’s license or social security number.They’ll bend on that requirement if it enables them to finally rid themselves of the credit card fees.