MCX merchants restricted to CurrentC payment system, using Apple Pay incurs fines

Posted:
in General Discussion edited November 2014
Partners of the Merchant Customer Exchange consortium, which include retail giants Walmart, CVS, The Gap and more, are contractually obliged to use the upcoming CurrentC mobile payments solution, a forthcoming competitor to Apple Pay, one report says.

CurrentC app


Citing anonymous sources with knowledge of the matter, The New York Times reported on Tuesday that MCX partners are forbidden from using mobile payment alternatives like Apple Pay, lest they incur high penalty fees for broken contracts.

The report confirms suspicions of systematic Apple Pay denial first aroused when MCX merchants Rite Aid and CVS began declining Apple Pay transactions this past weekend. Prior to that, retail monolith Walmart and fellow MCX partner Best Buy said they would not support Apple Pay.

Walmart commented on the matter yesterday, saying MCX has consumers' best interests in mind in denying Apple Pay and other mobile payments options.

MCX is on the brink of rolling out its own mobile payments competitor in 2015 called CurrentC, an app-based solution in development since 2012. CurrentC generates unique QR codes upon checkout, requiring users present their smartphone to a cashier. Alternatively, the point-of-sale terminal may also generate a code to be scanned by the customer.

The consortium is looking to bypass credit card network fees by linking directly to customers' bank accounts, but the security implications of such a system are troubling at best. In addition to avoiding swipe fees, CurrentC enables purchase tracking and processing for loyalty programs, coupons and special offers to further boost MCX merchant sales.

Apple Pay, on the other hand, is anonymized, designed to work seamlessly with compatible POS terminals and does not share customer purchasing metrics with retailers. Facilitated through NFC technology, iPhones users can simply take out their handset and authenticate a purchase via Touch ID. On the backend, a secure NFC module monitors for nearby terminals and sends over tokenized payment data from a secure hardware element without need for additional user interaction.

At this point, only iPhone 6 and iPhone 6 Plus hardware is capable of performing in-store Apple Pay purchases, though Touch ID-equipped devices like the new iPad models can make in-app purchases through the payment system's online component. The Apple Watch will also support contactless Apple Pay when it launches early next year.

Apple CEO Tim Cook on Monday said users activated more than one million cards with Apple Pay in the first 72 hours of availability, making it the largest contactless payments service in the country. As for adoption from reluctant merchants like those that make up MCX, Cook said the "skirmish" would ultimately be decided by consumers "over the long arc of time."
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Comments

  • Reply 1 of 163
    ronmgronmg Posts: 163member
    So how can Target be an MCX merchant and still support Apple Pay?!?!?
  • Reply 2 of 163
    ronmgronmg Posts: 163member
    In this day and age, most people don't have enough money in there savings or checking account to afford to live. Most people are living off of credit cards. Why does MCX feel that people will use their service tied to their savings or checking account?
  • Reply 3 of 163
    MacProMacPro Posts: 17,998member
    ronmg wrote: »
    So how can Target be an MCX merchant and still support Apple Pay?!?!?


    Target has partnered with Apple for online payments, but it does not accept Apple Pay in its stores.
  • Reply 4 of 163
    ronmg wrote: »
    So how can Target be an MCX merchant and still support Apple Pay?!?!?
    They support it in-app but not in-store
  • Reply 5 of 163
    MacProMacPro Posts: 17,998member
    ronmg wrote: »
    In this day and age, most people don't have enough money in there savings or checking account to afford to live. Most people are living off of credit cards. Why does MCX feel that people will use their service tied to their savings or checking account?

    While true for many that is equally not true for many.
  • Reply 6 of 163
    ronmg wrote: »
    In this day and age, most people don't have enough money in there savings or checking account to afford to live. Most people are living off of credit cards. Why does MCX feel that people will use their service tied to their savings or checking account?

    And those that have ample amounts of money in their bank accounts are not going to trust retailers with their account info
  • Reply 7 of 163
    solipsismxsolipsismx Posts: 19,566member
    ronmg wrote: »
    So how can Target be an MCX merchant and still support Apple Pay?!?!?

    A couple things come to mind. 1) Target, because of their size or because of when they signed up, was able to not have that as part of their contract. 2) The fines are somehow capped so a large company like Target did a cost-beneficial analyses which found supporting more payment options are worth it.

    ronmg wrote: »
    In this day and age, most people don't have enough money in there savings or checking account to afford to live. Most people are living off of credit cards. Why does MCX feel that people will use their service tied to their savings or checking account?

    I know plenty of people that use their debit cards as their primary payment method.
  • Reply 8 of 163
    You can request that President Obama order a DOJ investigation of MCX for possible illegal anti-competetive collusion by signing this petition:

    http://wh.gov/icBmj

    It couldn't hurt too have the DOJ look into this strange case of competing merchants co-owning an entity that requires that they behave like a union to act together against credit card processors.
  • Reply 9 of 163
    solipsismxsolipsismx Posts: 19,566member
    bc2009 wrote: »
    You can request that President Obama order a DOJ investigation of MCX for possible illegal anti-competetive collusion...

    MCX is doing nothing illegal by finding partners who willingly agree to a contract.
  • Reply 10 of 163
    MacProMacPro Posts: 17,998member
    solipsismx wrote: »
    MCX is doing nothing illegal by finding partners who willingly agree to a contract.

    Anyone know the actual $ involved. It could be less to pay up than miss out on ?Pay.
  • Reply 11 of 163
    If this was true, why was Google wallet allowed before? They probably get fined for making transactions with non-cash that they cannot provide transaction data to MCX. The lack of data is what scares an organization created to exchange data between merchants. The fees has always been step two in thier plan.
  • Reply 12 of 163
    muppetrymuppetry Posts: 3,328member
    solipsismx wrote: »
    ronmg wrote: »
    So how can Target be an MCX merchant and still support Apple Pay?!?!?

    A couple things come to mind. 1) Target, because of their size or because of when they signed up, was able to not have that as part of their contract. 2) The fines are somehow capped so a large company like Target did a cost-beneficial analyses which found supporting more payment options are worth it.

    ronmg wrote: »
    In this day and age, most people don't have enough money in there savings or checking account to afford to live. Most people are living off of credit cards. Why does MCX feel that people will use their service tied to their savings or checking account?

    I know plenty of people that use their debit cards as their primary payment method.

    True, but credit cards do give additional rights and protections to the consumer, as well as the various cash back schemes, and so even if one doesn't need the credit, purchasing on a credit card is generally preferable.
  • Reply 13 of 163
    solipsismxsolipsismx Posts: 19,566member
    Anyone know the actual $ involved. It could be less to pay up than miss out on ?Pay.

    It very well could be, but remember that ?Pay isn't yet 10 days old and the number of iPhone 6 series devices is extremely low right now for the marketplace. I say let the retailers some time to see how they can skirt their MCX contract, but I think CurrentC only becomes an issue of real annoyance a year from now when there are 3 devices by Apple on the market, at least two more being made ready, millions of vendors (along with the 2015 law in the US for secure payments), and Apple wanting to push ?Pay to more countries. I really don't think CurrentC has any chance as it's currently setup.

    If this was true, why was Google wallet allowed before? They probably get fined for making transactions with non-cash that they cannot provide transaction data to MCX. The lack of data is what scares an organization created to exchange data between merchants. The fees has always been step two in thier plan.

    It might be as simple as Google Wallet was never seen as a threat so it was never enforced by MCX.
  • Reply 14 of 163
    Quote:
    Originally Posted by BC2009 View Post



    It couldn't hurt too have the DOJ look into this strange case of competing merchants co-owning an entity that requires that they behave like a union to act together against credit card processors.

     

    Because they're acting against networks that are owned by banks. Who signed a $5.7 Billion antitrust settlement a few years ago. That argument's going to go over real well.

  • Reply 15 of 163
    So, if I understand the WalMart statement correctly, MCX has my best interests as a consumer at heart by:

    - Forcing me to use only their product
    - Forcing me to jump through a more cumbersome process
    - Forcing me to use a system that is arguably less secure than a competing one
    - Forcing me to tie the solution to my bank account, and
    - Limiting my choice and flexibility in payment sources

    Did I miss anything, there?

    The 'CurrentC' solution is very cumbersome. Not only is it highly unlikely to be as secure as ApplePay, but it forces the user to jump through a lot of hoops to make a payment. Any payment solution needs to be both secure and simple. If it cannot rival or surpass the simplicity of pulling out and swiping a card, then it is going to be very tough for it to gain traction. I don't see any indication in what I have seen of CurrentC that would convince me that it is a better option than ApplePay, nor which would convince me that anyone forcing me to use it had my "best interests" at heart.
  • Reply 16 of 163
    muppetry wrote: »
    True, but credit cards do give additional rights and protections to the consumer, as well as the various cash back schemes, and so even if one doesn't need the credit, purchasing on a credit card is generally preferable.

    I don't understand why anyone in the US, unless they cannot get a credit card due to poor credit, would choose to use a debit card over a credit card. Better points, better protection, and you get about a month's worth of free float. Just keep paying off your credit card online as soon as it reaches 10% of your credit limit, and it will start improving your credit too.
  • Reply 17 of 163
    melgrossmelgross Posts: 31,375member
    solipsismx wrote: »
    MCX is doing nothing illegal by finding partners who willingly agree to a contract.

    You mean, like the book publishers?

    This could be considered to be restraint of trade.

    Since this system requires an app from the App Store, which is already there, though it only works for a few people for testing, and in the Google Play store, I wonder if both Apple and Google could tell MCX that if they keep their requirement that their NFC payment systems on the terminals refuse other forms of NFC payment, that they, Apple and Google, will remove the apps from their stores.

    If they could do that, it would kill this before it begins. I'm not sure of the legality of this. And. It's too late at night to speak to someone who does.
  • Reply 18 of 163
    melgrossmelgross Posts: 31,375member
    If this was true, why was Google wallet allowed before? They probably get fined for making transactions with non-cash that they cannot provide transaction data to MCX. The lack of data is what scares an organization created to exchange data between merchants. The fees has always been step two in thier plan.

    The system wasn't nearly ready, and Google Wallet wasn't much of a threat, as almost no one has been using it.
  • Reply 19 of 163
    Quote:
    Originally Posted by melgross View Post



    Since this system requires an app from the App Store, which is already there, though it only works for a few people for testing, and in the Google Play store, I wonder if both Apple and Google could tell MCX that if they keep their requirement that their NFC payment systems on the terminals refuse other forms of NFC payment, that they, Apple and Google, will remove the apps from their stores.



    If they could do that, it would kill this before it begins. I'm not sure of the legality of this. And. It's too late at night to speak to someone who does.

     

    That's brilliant.  I hope they both do it, though I highly doubt Google would.

     

    The brilliance in this comes from playing the same card that MCX has.  What MCX is doing is blatantly anti-consumer because it forces them to use an arguably inferior product if they want to make mobile payments.  So they have no effective grounds to argue against the removal of their app from the store; if they attempt to argue that it limits consumer choice, all that will do is cast a harsh light on their own actions, which do exactly that.

     

    I love it.

  • Reply 20 of 163
    I propose we all boycott stores that are actively not accepting Apple Pay or Google wallet. To do so we set aside a specific day that all Apple Pay users go to one of the stores, get a ton of stuff in our carts. Go to check out and attempt to pay with Apple Pay, when it is declined or not accepted, say sorry looks like I can't pay. (Leave all other payment services at home) Totally sucks for the workers but it might send the message that people want to use every type of payment method.
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