Walmart says MCX has consumers' 'best interests in mind' by not accepting Apple Pay
After members of the Merchant Customer Exchange pulled support for Apple Pay mobile payments this past weekend, specifically Rite Aid and CVS, a major partner in the consortium has offered its take on why Apple's solution is not being implemented.
Offering color to the brewing mobile payments battle seemingly sparked when Apple threw its hat into the mobile payments ring last week, an unnamed Walmart representative told Business Insider that big-name retailer consortium MCX is thinking of consumers when it comes to denying support for Apple Pay.
When Apple Pay launched last Monday with iOS 8.1, iPhone 6 and 6 Plus owners eager to test out Apple's first foray into mobile payments struck out to see where and how the system worked. Initially, MCX partners Rite Aid and CVS supported NFC-based touch-less transactions, including Apple Pay, but that changed by the weekend. As of Saturday, the two drug store chains had shut down NFC transactions, assumedly the result of contractual obligations to MCX.
CurrentC has been in development since 2012, but is a far cry from Apple's streamlined solution. A smartphone-powered system, CurrentC requires users download a specialized wallet app that generates a QR code for scanning upon checkout. Alternatively, a point-of-sale terminal can generate the code to be read by a user's smartphone. Either way, customers need to open the app and present their device to make in-store purchases.
Unlike Apple Pay, CurrentC offers incentives like rewards programs, but critics point out purchase histories are recorded and can be used in marketing campaigns. CurrentC also requests to link up with users' bank accounts, while Apple Pay deals only with credit and debit cards at this time.
In addition to the security risks, CurrentC's implementation is more of a burden when compared to Apple's protocol. On checkout, Apple Pay automatically recognizes POS terminals, requiring only a simple thumbprint scan through Touch ID to send over relevant anonymized payment data, which is then processed as a secure tokenized transaction.
The mobile payments space is estimated to grow into a multi-billion business and MCX is looking to get a piece of that pie by bypassing credit card network fees. Apple is also reportedly collecting swipe fees for Apple Pay payments, and may move further into the industry depending on Apple Pay's performance.
At such an early stage in the game, no one payments option can be named a decisive frontrunner, but initial Apple Pay tests bode well for the system's future. It will be interesting to see how MCX responds to pushback from consumers, something the consortium is at least taking into consideration given today's comments.
Offering color to the brewing mobile payments battle seemingly sparked when Apple threw its hat into the mobile payments ring last week, an unnamed Walmart representative told Business Insider that big-name retailer consortium MCX is thinking of consumers when it comes to denying support for Apple Pay.
Apparently the statement took a bit of cajoling, and for good reason, as the topic has developed into something of a hot button issue over the past few days. Following Apple's remarks on the matter, Walmart's thoughts offer valuable insight from the perspective of MCX, which is on the brink of rolling out Apple Pay competitor CurrentC.There are certainly a lot of compelling technologies being developed, which is great for the mobile-commerce industry as a whole. Ultimately, what matters is that consumers have a payment option that is widely accepted, secure and developed with their best interests in mind. MCX member merchants already collectively serve a majority of Americans every day. MCX's members believe merchants are in the best position to provide a mobile solution because of their deep insights into their customers' shopping and buying experiences.
When Apple Pay launched last Monday with iOS 8.1, iPhone 6 and 6 Plus owners eager to test out Apple's first foray into mobile payments struck out to see where and how the system worked. Initially, MCX partners Rite Aid and CVS supported NFC-based touch-less transactions, including Apple Pay, but that changed by the weekend. As of Saturday, the two drug store chains had shut down NFC transactions, assumedly the result of contractual obligations to MCX.
CurrentC has been in development since 2012, but is a far cry from Apple's streamlined solution. A smartphone-powered system, CurrentC requires users download a specialized wallet app that generates a QR code for scanning upon checkout. Alternatively, a point-of-sale terminal can generate the code to be read by a user's smartphone. Either way, customers need to open the app and present their device to make in-store purchases.
Unlike Apple Pay, CurrentC offers incentives like rewards programs, but critics point out purchase histories are recorded and can be used in marketing campaigns. CurrentC also requests to link up with users' bank accounts, while Apple Pay deals only with credit and debit cards at this time.
In addition to the security risks, CurrentC's implementation is more of a burden when compared to Apple's protocol. On checkout, Apple Pay automatically recognizes POS terminals, requiring only a simple thumbprint scan through Touch ID to send over relevant anonymized payment data, which is then processed as a secure tokenized transaction.
The mobile payments space is estimated to grow into a multi-billion business and MCX is looking to get a piece of that pie by bypassing credit card network fees. Apple is also reportedly collecting swipe fees for Apple Pay payments, and may move further into the industry depending on Apple Pay's performance.
At such an early stage in the game, no one payments option can be named a decisive frontrunner, but initial Apple Pay tests bode well for the system's future. It will be interesting to see how MCX responds to pushback from consumers, something the consortium is at least taking into consideration given today's comments.
Comments
The supplier of fans of 'Honey Boo Boo' says something...
They are thinking of customer data when they say this and not customers.
Merchant Customer Exchange = Merchants that exchange customer data.
They hate the anonymity of Apple Pay. You know they are already pooling customer data on card swipes because they can. CurrentC is about cutting out the credit card companies the data sharing part doesn't require CurrentC. It just looks to get worse as people need to provide so much sensitive information for an account.
I'm boycotting all of the MCX stores I can. If I must go to one, they can have some cash. They can suck on their big data.
Apple's Apple Pay system is compatible with any merchant with a working NFC WavePass system as a point of sale terminal. This is already the worldwide standard and soon to be the standard in the US in a year. Google's Android phones and WavePass credit cards use this system too. If there is no support necessary from your company to make it work, why are you actively blocking its use?
As a consumer I'm not interested in jumping through a lot of hoops simply to make a payment, especially when simpler methods are available. Also, I really don't trust supplying vendors with my secured personal information, nor do I like their asking for it.
I would rather do with credit card where if don't have funds the transaction will get declined or if goes through it will post and may get charged a $34 insufficient funds fee but atleast will only be charged 1 $34 fee as compared to what could be 5 or 6..
Walmart, can you explain please? What are the benefits to the customers when using your system instead of Apple Pay?
Huh? If the above is true, and Walmart truly has the "consumers' best interests" in mind, why not allow both payment systems to operate side by side in their stores?
Damn hypocrites.
"CurrentC also requests to link up with users' bank accounts"
The kiss of death for a very secure payment system and a disaster waiting to happen.
This will back fire. With all the data breeches costing corporations millions they should be happy to shift the responsibillty to the banks. The value of mining customer data can't be worth the exposure to a data breech. Provide a better service that offers loyalty rewards without the CC info being recorded.
So let me get this straight, Walmart of all companies, knows more about customer experience than the top retailer in the world? I guess it's kinda like they know their employees' best interests also. I don't care that they have CurrentC, just let it compete fairly and let the customer decide what his/her best experience is. No different than a credit card, except, oh wait, what do you mean we can't mine your data?
Why does the Vagiclean scene from Me, Myself, and Irene come to mind? Can someone please post it?
Here you go!
Don't pay cash. Force them to pay the fee. I think, and I could be mistaken, but come October 2015, they will be responsible for fraud issues. Stick it to em!
Like I needed *another* reason to avoid Walmart! Scum of the Earth, they are! Too bad there are too many mindless humans that don't care about anything but themselves.
"There are certainly a lot of compelling technologies being developed, which is great for the mobile-commerce industry as a whole."
Huh? If the above is true, and Walmart truly has the "consumers' best interests" in mind, why not allow both payment systems to operate side by side in their stores?
Damn hypocrites.
Exactly! +1 on this!
But it gets funnier: now we have Walmart to tell us that what consumers really want is CurrentC! Because why would you want to pay with just a touch of your thumb to your iPhone, when you could have the pleasure of first opening an app, then scanning a QR Code, not to mention agreeing to have your purchase history recorded and tracked and... oh, did we mention you have to link us to your bank account? And you KNOW that info will all be secure, given the scores of millions of customers whose credit and identity information was compromised when hackers broke through security systems as various MCX member stores chains.
MCX, Wal-mart, et al, don't care about the "consumers' best interests". They are trying to cut credit card companies out of the transaction fees.
from http://daringfireball.net/linked/2014/10/27/shevlin-currentc:
"Former Wal-Mart CEO Lee Scott when asked why MCX could succeed when so many other consortium had failed. Scott's answer tells you a lot about CurrentC, and MCX. He said, "I don’t know that it will, and I don’t care. As long as Visa suffers."