“Apple Inc.’s mobile payment technology ran into a roadblock a week after its introduction as CVS Health Corp. and Rite Aid Corp., part of a consortium developing a competing system, disabled Apple Pay in their drugstores,” Tim Higgins and Zeke Faux report for Bloomberg. “The drug retailers stopped Apple Pay last week, said a person familiar with the situation who asked not to be named. The website MacRumors.com earlier reported that the stores disabled so-called contactless payment systems, and Slashgear.com published a purported internal memo in which Rite Aid says it is instead focusing on the consortium’s system.”
“CVS and Rite Aid are part of a consortium of retailers called the Merchant Customer Exchange that has been working on its own mobile payment system to help bypass credit card companies. The group’s system, called CurrentC, is in pilot tests in select locations across the country with plans for a national rollout next year, according to a statement on its website. Network members include Wal-Mart Stores Inc., Lowe’s Cos. and Target Corp., the website shows,” Higgins and Faux report. “Apple Pay had been working at CVS and Rite Aid, Edward McLaughlin, chief emerging payments officer at MasterCard, said in a telephone interview. “It was working great,” he said. ‘It’s almost baffling to me’ that stores would block the payment systems. Even before Apple Pay began working on Oct. 20, some retailers were expressing concerns, especially those that want to collect user data.”
Read more in the full article here.
“QR codes. Good luck with that. Plus, CurrentC doesn’t even work with credit cards — it only works with prepaid store cards and debit cards tied directly to your bank account. Apple Pay is built atop the credit card system; CurrentC is an attempt — futile, I say — to eliminate credit cards,” John Gruber writes for Daring Fireball. “Tim Cook was exactly right on stage last month when he introduced Apple Pay: it’s the only mobile payment solution designed around improving the customer experience. CurrentC is designed around the collection of customer data and the ability to offer coupons and other junk.”
“These retailers who are shutting down their NFC payment systems are validating that Apple Pay is actually working, that people are actually using it. And remember, it only works with the month-old iPhones 6. Think about what happens a year or two from now when a majority of iPhones in use are Apple Pay enabled,” Gruber writes. “They’re turning off NFC payment systems — the whole thing — only because people were actually using them with Apple Pay. Apple Pay works so well that it even works with non-partner systems. These things have been installed for years and so few people used them, apparently, that these retailers would rather block everyone than allow Apple Pay to continue working.”
“And the reason they don’t want to allow Apple Pay is because Apple Pay doesn’t give them any personal information about the customer. It’s not about security — Apple Pay is far more secure than any credit/debit card system in the U.S. It’s not about money — Apple’s tiny slice of the transaction comes from the banks, not the merchants. It’s about data,” Gruber writes. “They’re doing this so they can pursue a system that is less secure (third-party apps don’t have access to the secure element where Apple Pay stores your credit card data, for one thing), less convenient (QR codes?), and not private.”
Much more in the full article – recommended – here.
MacDailyNews Take: Boycott CVS and Rite Aid.
CVS and Rite Aid are looking to harvest personal data from their customers, not serve them. CVS and Rite Aid are willing to hurt their most well-heeled customers, iPhone users, so that they can line their pockets. This is simply bad business.
If at all possible, patronize Walgreens and/or Duane Reade who both offer the secure Apple Pay system, with its emphasis on privacy, to their valued customers.
Related article:
CVS stores reportedly disabling NFC to shut down Apple Pay – October 25, 2014
iPhone users earn significantly more than those who settle for Android phones – October 8, 2014
Yet more proof that Android is for poor people – June 27, 2014
More proof that Android is for poor people – May 13, 2014
Apple’s iOS dominates in richer countries, Android in poorer regions – March 25, 2014
Twitter heat map shows iPhone use by the affluent, Android by the poor – June 20, 2013
iPhone users smarter, richer than Android phone users – August 16, 2011
Yankee Group: Apple iPhone owners shop more, buy more, remain more loyal vs. other device users – July 20, 2010
This reminds me of the Sears/Circuit City initiative called Divx when DVD’s were released. Not to be confused with the video format, Divx was created as a competitor to the DVD rental business. Disposable DVDs that had to be used with a specific player connected via a phone line to authenticate the rental that could only be played so many times before it became useless.
We all know what became of Sears and Circuit City. Retail never learns
I thought exactly the same thing! Remember, DIVX helped push Circuit City into bankruptcy!
——RM
I have to get my prescriptions from CVS because of my health plan. I don’t have to get anything else from them, though. F*** ’em.
And here’s what I don’t get. Maybe more than half the CVS and Rite Aid stores have a Walgreens right the heck next door. It doesn’t inconvenience me at all to take my business from Rite Aid to Walgreens — the Walgreens is directly across the street! The second-closest CVS to me also has a Walgreens just two lots away, maybe a three-minute minute walk.
I could see doing something like this to your customers if you had a captive audience, but it’s not even the slightest inconvenience for at least half your customers to go to Walgreens instead.
My note to MCX
I use Apple pay and resent your members trying to kill it by restricting a free market in consumer choice for payment. We do not want a data mined, insecure, merchant owned, captive payment system. Tell your cartel to keep on the course they are on and see sales numbers continue to decline.
I will spend my Dollars where my payment system of choice is honored an will avoid a big data grab by greedy companies that think we are sheep to be sheared. You can stick CurentC where the sun does not shine and tell Wal-Mart to keep posting those ever declining earnings.
Send your note to
Information: info@mcx.com
I always use credit cards for larger purchases because it has automatic insurance on the purchase which debit cards do not. How the hell can a system plan to cut out that safety net and e pe to to succeed. It’s a total dead end for more reasons than that mind.
Three can play at this game. If CurrentC doesn’t want its merchant to use any other mobile devices payment systems at their stores except CurrentC, perhaps Google and Apple can decide that they do not need to host CurrentC apps in the Apple App Store or the Google Android Play Store as officially sanctioned apps. Oops?