Sunday27 November 2022

Apple Pay Competing with Walmart, not Google

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When Apple announced their new NFC payment system it seemed the press and analysts were in nirvana. You could not open up a news site without seeing a headline on how Apple pay was going to change your life. Most of these failed to acknowledge that mobile payments (even through NFC) have existed for decades and that Google Wallet was and still is accepted at a number of locations. They were convinced that Apple pay was the way to go and they (Apple) had the future in their hands.

All of that hype and boast started to fall apart the other day when at least one retailer (CVS) decided to block Apple Pay from their NFC payment system. It was an unusual move and one that set off a stream of articles both for and against the move. Regardless of the opinions about the move it is still one of the first times that a major chain has snubbed Apple is this way. This is not a matter of CVS not having the systems to allow Apple Pay, but them specifically blocking the use of the service for transactions.

CVS and RiteAID have come out and stated that they are opting out of Apple Pay in favor of another form of digital currency called CurrentC which happens to be part of the Merchant Customer Exchange or MCX. MCX for those of you that might care is pretty much run by Walmart. MCX is made up of more than just Walmart though, there are several large retail groups that are represented. All of these groups are looking for ways out of the common merchant and swipe fees that are part of doing business using magnetic cards.

CurrentC has some requirements that include membership fees and a certain level of commitment where you chose one form of payment or another. Apple Pay is not part of the deal if you are already signed up to use CurrentC through MCX. As we mentioned CurrentC was created to help fight off swipe fees. These fees have become a big money maker for credit and debit card companies. Every time you swipe your credit card the merchant has to pay a fee that can range from a set dollar amount to a percentage of the purchase. Merchants have been fighting to reduce and or cap the fess that the credit card companies charge for years with little movement except for some promises to cap (that do not seem to help).

This payment system and the group are part of the reason that NFC has not taken off as well as it could have. Google and Nokia before them ran into this type of resistance when they wanted to introduce NFC direct payments. Perhaps Apple was blind to this issue, but they managed to get themselves between the credit card companies and the merchants with Apple Pay. Because of this and the resistance on both sides the technology is not likely to take off even for Apple. This is no matter how much journalist and analysts want it to. In the end money is always going to trump progress… well that is unless the progress allows all parties to make more money.

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Last modified on Wednesday, 29 October 2014 15:36

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