Wal-Mart’s Answer To Apple Pay Sounds Terrible

October 27, 2014

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Wal-Mart's Answer To Apple Pay Sounds Terrible

Courtesy of JAY YAROW at Business Insider

Retailers are rejecting Apple's mobile payment system, Apple Pay.

This weekend, CVS and Rite Aid shut down their NFC systems that accepted Apple Pay and Google Wallet. Wal-Mart doesn't have NFC terminals, but even if it did, it would probably reject Apple Pay.

These stores are rejecting Apple Pay because they have their own mobile payment system in the works. It's an app called "CurrentC."

Josh Constine at TechCrunch has a big look at CurrentC. It doesn't sound good.

Here's how it works: When it's time to pay for something, you get a QR code served to you on a payment terminal. You then open your phone, open the CurrentC app, then scan the QR code to pay. It can also work in reverse, where you open your phone, and you have a QR code, and the retailer scans the code.

Compare that with Apple Pay, which works like this: When it's time to pay, take out your phone, hold it to the payment terminal, then use the phone's fingerprint scanner to pay, and you're done.

Or, compare both with credit cards: When it's time to pay, take out your credit card, swipe it, sign, and be on your way.

Why are retailers doing CurrentC? Because they hate paying credit-card companies 2% to 3% on each transaction. CurrentC is run through banks/debit cards, which avoids those fees.

BII

CurrentC is the product of a consortium of US retailers called MCX, which is led by Wal-Mart. Members of MCX account for one in five retail dollars spent in the US.

In 2013, FierceRetailIT reported that MCX was signing retailers to exclusive three-year deals. Retailers couldn't use any other mobile payments systems over a three-year period that started in either 2012 or 2013. That is probably the reason CVS and Rite Aid are shutting down their NFC readers. They are probably contractually obligated.

Beyond being clunky to use, CurrentC also sounds invasive. To sign up, it supposedly wants your social security number and driver's license number to verify who you are. The app collects a lot of information, including your health and location data.

For these reasons, we predict CurrentC is going to be dead on arrival. It's worse than using a credit card, and it's creepy.

It's going to be a bit of a setback for Apple in the short-term, but in the long run it shouldn't be a problem. Retailers want to make paying for stuff as easy, and as secure, as possible. If Apple Pay is an easy secure solution that people actually want to use, then retailers will adopt Apple Pay as soon as they are out of their contract with MCX.