Apple Pay Faces Challenge as CVS, Rite Aid Reject System

http://www.bloomberg.com/news/2014-10-26/apple-pay-face-challenge-as-cvs-rite-aid-reject-system.html

by forrest_t • 12 years ago

58 54 12 years ago

MCRed• 12 years ago

Headline is misleading. First paragraph makes it clear that these companies are not "rejecting" Apple Pay (and google wallet for that matter) but are excluding support for them because they are part of a competing consortium.

netcraft2• 12 years ago

Im unclear about the difference - how is turning off support for NFC (and with it apple pay and google wallet) not rejecting it?

post_break• 12 years ago

Apple Pay worked last week. Google Wallet worked for years. This is really not looking good for their competing product. Boycotts are starting to trend on Twitter, and for good reason.

aaronbrethorst• 12 years ago

I like how the article never mentions the reception that the competitor, CurrentC, has received. https://itunes.apple.com/us/app/currentc/id912922036?mt=8

Design fail:

    Why should anyone have to grant access to
    their personal checking account, health data
    and allow tracking of their purchases!?

I wish I could give less stars:

    This app would only provide me with less
    security and less convenience.

Horrible mobile payment:

    you think Target and Home Depot breaches
    were bad? Wait until those hackers got a
    hold of your bank account and drain it!

MBCook5• 12 years ago

Oh but it gets worse.

Apple Pay is very accessible because of it's design, but CurrentC isn't. http://stevensblog.org/apple-pay-rejections/

But don't worry the CurrentC app is horrible for people without any accessibility issues. They want your driver's license and Social Security numbers. http://twitter.com/hasanahmad80/status/526551322523623424/ph...

TechCrunch walked through how this terrible app works and what data it wants including: location (OK), health & medical (WHAT?), browser history, phone & text logs.

And who needs security? Its privacy policy only shows that it may share data with carriers, ad networks, consumer data resale, analytics, government, and others.

http://techcrunch.com/2014/10/25/currentc/

thinkcomp• 12 years ago

Financial account providers are required to ask for personal identifiers as a result of the USA PATRIOT Act. You have to provide your SSN when you apply for a credit card or bank account, as well.

As for the rest...yeah, seems a bit much.

paul9290• 12 years ago

That's funny ... how long can and will this consortium flagrantly piss off their customers?

brighton364• 12 years ago

All of these centralized solutions require a massive amount of trust in order to work. It's fairly obvious that any pull-based route is encumbered by so much counterparty risk that it simply cannot scale without a fairly massive amount of insurance to support the product.

timw0j• 12 years ago

The reviews on Google Play don't look much better: https://play.google.com/store/apps/details?id=com.currentc

guelo2• 12 years ago

All of those reviews are from the last few days after the news came out. I doubt any of them are real users.

eddieroger• 12 years ago

It's in closed beta, so of course it's unlikely that these are real users. That doesn't make the comments less true.

wfjackson2• 12 years ago

The app got featured on Reddit's Apple and Android subreddits and readers were encouraged to post bad reviews, so I wouldn't read it as "public" reception, although I do agree the app is suboptimal to put it generously. Most reviews in the last few days were most probably posted by people who didn't like Apple Pay/Google Wallet being removed as an option.

brighton364• 12 years ago

Until there's a system that works for consumers 98% of the time or more, consumers will continue to reach into their wallets for a plastic card. Proprietary software vendors are never going to hit that rate of acceptance, and for the most part, they're all wasting their time with these half-baked implementations. As soon as a universal open standard of payments becomes accepted by the big merchants, that's when these mobile payment space will take off. No one wants to embrace Bitcoin for all the obvious reasons, but there is no other competing solution, so it'll clearly be the inevitable, if not reluctant, winner in this market.

quonn• 12 years ago

More likely, Apple and Google will cooperate if they have to. Or Apple will revert to their old policy and remove Bitcoin apps from the App Store.

brighton364• 12 years ago

ISPs in the 90s never cooperated to form a neutral standard for content design and layout because there was never a standard that could possibly serve any one of their interests without coming at an expense to every other member in a coalition. This early mobile payment space is highly comparable to that industry. Further, there's a lot more providers in this space than Apple and Google. Those two have already merged onto a fairly similar NFC standard, which is about as far as they could go without support from merchants. Meanwhile, merchants are fairly rapidly adopting Bitcoin.

Bud• 12 years ago

In order for Apple Pay to be facing a "challenge", wouldn't there have to be, say, an actual competing product, as opposed to some unwise executive at RiteAid deciding to unilaterally disable NFC readers that they already have paid for (amazingly childish) and placed in their stores, along with mumbling about some maybeware solution that they might ship in 2015?

ganeumann• 12 years ago

Apple faced the same sort of defection with the iTunes Store. Not every music publisher allowed its music to be sold there at first. Music publishers also put together competing consortiums to distribute emusic through companies they controlled. It's perfectly rational for them to want to do this (it's been said that while more music is bought than ever before, recording industry revenues have been cut in half) but it seems unlikely that a CVS/Rite Aid consortium will release a product more popular with consumers than Apple's might be.

But it still might take several years for other competitors to give up and join in. And, of course, anything can happen in that time.

Eric_WVGG• 12 years ago

Why don’t they just call CurrentC “ZuneBucks” or “PaysForSure” so we can get this over with?

davidholmesnyc• 12 years ago

This sucks. I don't know why the mobile payment space is so competitive. It would make more sense to me that any retailer would accept as much different sources and methods of payment as possible to make the purchasing user experience as seamless and easy to use as possible.

owenmarshall• 12 years ago

That makes sense on a small scale. But with big retailers, the calculus changes a bit. The data a big retailer gets from my purchase history: when I come in to the store, what I buy, etc., is potentially very valuable.

CurrentC would allow my purchases to be tracked across multiple major retailers and aggregated. The value there is incredible. Possibly worth more than the merchandise I buy? Very possibly, I'd think.

asadotzler• 12 years ago

How dare the retailers have their own system that tries to cut out the credit card middleman.

netcraft2• 12 years ago

I don't think the issue is that customers don't like competition, its the fact that they are being hostile towards the ones trying to give them money, restricting consumer choice and forcing a sub-par solution that is not as convenient at best and downright insecure at worst.

I think you'd see a similar backlash if CVS decided to take cash only because they wanted to cut out the credit card middleman.

Karunamon• 12 years ago

At least that would be defensible, and a superior solution to this abysmal "CurrentC" app!

Someone1234• 12 years ago

So the CurrentC people are trying to assure CurrentC's future by pissing off the very same companies that they need to authorise their app? That seems like they're shooting themselves in the foot.

What are they going to do if Apple in particular rejects CurrentC as an app? Do it via HTML5/WebKit? Cannot see the user experience on that being particularly good.

Plus as people on Reddit pointed out, with Apple Pay/Google Wallet, the liability for fraud is still with the banks. With CurrentC you MIGHT be liable for any fraud in the US (because of how credit and debit fraud is handled).

PS - The name "CurrentC" is just terrible. Least memorable name ever. They should have just called it "Vanilla."

MBCook5• 12 years ago

I actually thought the name was sort of clever.

Osmium• 12 years ago

So the CurrentC people are trying to assure CurrentC's future by pissing off the very same companies that they need to authorise their app?

And also the very people who are most likely to be first-adopters for a new payment platform...

omarrr• 12 years ago

^^^ This

guelo2• 12 years ago

Apple needs the big retailers too. People are getting mad at the retailers for playing the same ruthless hardball that Apple plays all the time.

SG-• 12 years ago

I'm not so sure if Apple needs Apple Pay to work everywhere, it's just another thing to make Apple experience "better". If people love it, then people might start buying only at stores that support it.

It turns out people that use Apple devices and services end up spending money and like staying inside that ecosystem.

wfjackson2• 12 years ago

What are they going to do if Apple in particular rejects CurrentC as an app?

File an anti-trust complaint? One need not be a monopoly in order to face anti-trust charges. E.g. See the ebook price fixing charge.

ceejayoz• 12 years ago

File an anti-trust complaint?

Good luck to them with that one. "Waaaah! Apple blocked our payment service!" "Why'd they do that?" "We blocked theirs!"

slouch• 12 years ago

The app is already available in Apple's store.

GoldenMonkey• 12 years ago

The digital payment dam is about to burst open. These companies are plugging holes in the dam with their fingers. There's no stopping the digital payment river.

pessimizer2• 12 years ago

Retailers want nothing less than universal digital payments. I'm not sure why you would think that they wouldn't. This is about Apple's solution vs. their own solution.

ojbyrne• 12 years ago

Ok, time to shop at Walgreens.

mikestew• 12 years ago

Anyone that's been around a while for things like DivX (no, the other one that the now-bankrupt Circuit City backed) and Plays for Sure (until we yank support) knows how this is going to end. Though disappointing that those backing this can't read those same tea leaves, what's really disappointing is that consumers are just going to have to wait while this plays out to the inevitable conclusion.

Look retailers, we understand why you're trying this, but snowballs in hell stand a better chance. Save us all a lot of waiting, and save yourselves some expense, own up to the inevitable and put the NFC readers back. In the meantime, expect not another dime from me, as I will actively go out of my way to avoid you and will actively seek out your competitors who have NFC readers.

EDIT: oh, wait, is it just CVS, RiteAid, and Walmart? So much for my boycott, as I'm willing to just do without before shopping at any of those three, NFC readers or not.

jonlucc• 12 years ago

I think the consortium would be much better off asking Apple (and Google) to work with them on figuring out a way to automatically tie purchases from a particular store with that store's rewards program. If I don't have to think about it, I'll gladly pay for my items, opt in to rewards (maybe once per company) and let them track me at only that company in exchange for the crappy coupons. They probably don't need my entire bank information, SSN, and DL # to do that.

VLM• 12 years ago

"The deadline for merchants to make the switch is October 2015; so far about 220,000 U.S. stores have done so, out of more than 10 million. The upgrade costs $500 to $1,000 per checkout terminal, according to Javelin Strategy & Research."

Why not just go to your local office supply store and look up that you can get a iCT250 for about $200 and from the ingenico website you can read that specific model "Gives options to accept all forms of payment including MSR, EMV, contactless and mobile NFC." "credit cards with chips" to the general public are "EMV" to retailers. I think I saw an ad for Staples for $250 for this exact terminal. Its a top of the line device and its only $200 to maybe $300 depending where you buy it. You could probably pay less.

I volunteer part time as treasurer for a non-profit and part of my "volunteer" work as the local IT expert was researching alternative payment methods for our fundraisers, none of which we (aka I) decided to implement. Partially because when you have a bazillion volunteer workers its a miracle if they can just get the name right on personal checks, there is no way in hell I'm personally training 50 people to accept 25 different digital payment methods. Also we keep more cash with our no fee non-profit checking account, so why make some middleman "rich". Our (edited: fundraiser event) cashflow is barely in the 5 digit range, and I can imagine orgs much bigger or smaller, or profit instead of non-profit, might have different end results.

(Edited to add, theres a new alternative digital payment method released roughly every 3 months, its very trendy. So next fall, that would be roughly 29 possible payment technologies for 50 people thats almost 1500 training sessions all of which have to be perfect. No thanks!)

georgemcbay• 12 years ago

This is a shitty situation for consumers and I think the retailers are making a big mistake, but it is also somewhat amusing to see so many Apple fans white-knighting for Apple considering they are a company that has routinely rejected (on their walled-garden App Store) apps or app updates to already existing apps because they "duplicate functionality" (read: "compete with our stuff").

My reaction is similar to when Apple gets sued for patent infringement on dumb patents -- it still makes me dislike the current patent system for abuse, but at the same time a part of me thinks it couldn't happen to a more deserving company in a "live by the sword, die by the sword" way.

abalone4• 12 years ago

Basically Walmart has had a vendetta against Visa/MC interchange fees (~2%) for years and is now at the point of acting irrationally.[1] They sued them to the tune of billions of dollars and of course that didn't kill them. They got the Durbin amendment passed and that didn't kill them. And the reason is simple: Visa/MC actually have consumers allied with them, thanks to things like purchase protections and reward programs. Consumers like paying with their existing Visa/MC cards.

So they got a bunch of other big retailers to sign exclusivity agreements to try to force customers to pay by direct checking account withdrawals (ACH), bypassing Visa/MC, in order to get mobile pay functionality. It's silly.

They hate Apple Pay because it further entrenches Visa/MC, their nemesis. Much of the criticism around this has focused on privacy and crappy app design, which is fair, but really the main motivation here is to kill Visa/MC.

I expect the more rational merchants will adopt Apple Pay once their exclusivity contracts expire.

On privacy: CurrentC does collect more customer info than Apple Pay (similar to signing up for a store card), but to be clear, merchants can still track your purchase behavior with Apple Pay. Apple Pay swaps in a device account # for your real account #, and that # can still be used to track your purchases over time. It's primarily a security thing (that # can only be used for TouchID-authorized payments).

When Apple talks about privacy it's mainly in comparison to other payment intermediaries (e.g. Google Wallet), i.e. Apple doesn't track your purchases. With respect to merchants, Apple Pay does hide your real name but tracking and those annoying register coupons based on your past activity are still very much possible. And if the merchant ever collected your email at some point, they could associate it with your device account # just the same as your real card #, just like before.

This is all a way of saying that MCX's main objective is not to bypass all the privacy protections that Apple Pay is putting in place against merchants, because Apple Pay doesn't really do that (apart from your real name). I'm sure MCX wouldn't mind grabbing more info -- we'd have to scrutinize the privacy policy -- but the main, longstanding, simmering motivation here is to try to kill interchange fees.

Unfortunately they are so irrational and short-sighted that they are willing to make life worse for consumers in the process, even though it has no chance of succeeding.

[1] "I don’t know that MCX will succeed, and I don’t care. As long as Visa suffers." - alleged Walmart CEO quote as reported by http://techcrunch.com/2014/10/25/currentc/

MBCook5• 12 years ago

Is the Apple Pay pseudo-card number constant for each device/merchant? I wondered if it changed on a regular basis or per transaction (sort of like one time use card numbers).

I don't blame Walmart for wanting an extra 2% profit, I object to having things shoved down my throat. Apple actually improves CCs for the first time in decades and MCX is trying to push a system with less privacy, protections (direct ACH access? Never), and no actual benefit to me.

Everything they want to do (for me) they can do with the little barcode loyalty cards or their own app and let me use Apple Pay.

Instead they play cartel.

abalone4• 12 years ago

Yes it's constant. One # per card-device combo.

Of course it also sends a unique cryptogram alongside it with each transaction which is what makes it super secure. Even if the merchant is hacked, the device account # is useless to hackers. But it can be used to track your purchases.

pcurve• 12 years ago

I do blame Walmart for wanting that extra 2% profit because they want to have their cake and eat it too.

Remember the time when gas stations charged more for credit card transaction? Well no more. Rather than fight the uphill battle, gas stations slowly raised their prices cover credit card transaction fees.

Same thing happened with most retailers. Many used to have $20 minimum for CC transaction years ago. That slowly went down to $0 for most places. Now you have people pay for soda with their debit cards.

People forget that retailers benefit tremendously from credit cards because studies have shown that people spend substantially more when they charge things on card, versus when they pay cash.

Well, now that Walmart business is hurting, they want to squeeze credit card companies. Even if they were able to cut CC companies out, the extra profit would eventually go away through competition.

needusername• 12 years ago

Curbing interchange doesn't hurt Visa/MC, it hurts the issuers. Thanks to the Durbin amendment debit interchange is on reasonable levels in the USA and now EU-cross-border credit interchange is on about the same levels. There are even special tricks you can play to get EU-cross-border credit interchange for domestic transactions outside of the EU.

If you want card holders to use cards with less interchange you have to incentivize them. As long as the card holder has only benefits from using with interchange cards and bears none of the costs they will keep using high interchange cards.

omarforgotpwd• 12 years ago

Can you really blame them? We in the tech industry are used to fat margins. Retail margins are thinner than the new iPad. If you were running a business like that, wouldn't you love to get an extra 2 - 5% of your revenue back, and exert considerable effort to do so?

Apple Pay Faces Challenge as CVS, Rite Aid Reject System

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