Some retailers have stopped accepting Apple Pay only a week after its launch, blocking the service in favour of an alternative option that is expected to launch in 2015.
Two major US drug stores Rite Aid and CVS were taking Apple Pay payments on their NFC terminals in the days after its launch, but reportedly disabled the service at the end of last week. The drug chains are rumoured to be joining a slew of other major retailers – Kmart, Sears, Target, Walmart, Best Buy and 7 Eleven – in support of Current C, a payments app in development by Merchant Customer Exchange (MCX).
CurrentC will not be available until 2015. When it is released, consumers will be able to download an app and connect it to their debit accounts. Then, every time a person makes a purchase, the merchant must scan a QR code, a special symbol that acts much like a bar code and initiates the payment transfer.
Critics say CurrentC will be harder to use than Apple Pay, which does not need the customer to open an app or scan a code in order to pay. But spearheaded by Walmart and run by other major US merchants like Best Buy and Gap Inc, the Merchant Customer Exchange could offer some enticing loyalty programmes to those willing to ignore the hype of Apple Pay.
Together, the companies operate over 110,000 retail locations and process over $1 trillion in payments annually, with a significant chunk coming in the form of credit card payments that cost the retailers fees. Participating merchants could avoid paying credit card fees in the 2 percent to 3 percent range by processing payments through Automatic Clearing House transactions through bank accounts that have much smaller fees.
While Apple Pay does not retain details of transactions, MCX’s payments system helps merchants keep track of customer shopping habits, a potential treasure trove of data for retailers.
With so many retailers behind it, CurrentC should gain some traction when it finally launches in 2015. But by then, Apple Pay’s more graceful payments process could have spoiled the service for potential CurrentC users, who may find its QR code method clunky and unappealing. But for merchants, the choice might not be so favourable towards Apple.
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