Bad business: CVS and Rite Aid antagonize their most well-heeled customers by blocking Apple Pay

“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 earlier reported that the stores disabled so-called contactless payment systems, and 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


    1. Walmart doesn’t win in my area. Wife is diabetic and her meds are screwed up almost every single month and only one month perscription allowed at a time at Walmart. Finally moved to CVS because it is near and they allow 3 and 6 months and get the meds right and on time for the past 3 months.

      I just moved to CVS for my occasional meds. This NFC shutdown will prompt me to move to Walgreens, even if it is a few miles further!

    2. Just load up your cart at CVS, go to the counter and say, “I have ApplePay”.

      When denied – just leave the full cart at the checkout and go to Walgreens. CVS will soon get the message.

      1. Better still: make them ring it up, then wjen they refuse Apple Pay, say never mind and force them to not only restock everything, but aslo void out the incimplete transaction.

        1. Although I like the sound of this, all you’re really doing is pissing off the minimum-wage teller and stock clerk. It won’t actually have an effect or the whole payment scheme. However, simply taking your business elsewhere will in fact show up on the bottom line next quarter where it will get attention from TPTB.

    3. I left CVS when they doubled my co-pay for Rx this last January. Then agin this summer, so a $9.95 RX last December now costs $42!
      I went to Walgreens and they are $9.95.
      Between that and CVS not wanting to sell people cigarettes – which are legal – I have left. No, I don’t smoke, but CVS seems hell bent on being a Big Daddy and I already have one thanks.

    1. You’re right. What I do when I pick up prescriptions for my father… I pay for the meds at the pharmacy counter. The receipt has those “extra buck” coupons. I then buy everything else I need on the way out, using whatever coupons are applicable.

  1. Again, as I said in the post about Walmart. This is not a war against Apple, it’s a war against privacy. And Walgreens seems to be a pretty fair competitor that stands for consumer privacy by accepting Apple Pay. I refuse to do business with a store that directly refuses to accept Apple Pay because what they are really saying is that they refuse to give you privacy options and want to use your personal information.

  2. CVS and Rite Aid have chosen to be part of the problem and not become part of the solution with regard to invasion of privacy.
    As for me, a long time customer of CVS, I choose to never do business with that company as a direct response to their action of not adopting Apple Pay. CVS, Rite Aide will rue the day they chose to mine data as opposed to respect consumers’ right to privacy of data.

  3. My only question is: Target are included in the retailers accepting Apple Pay–will they begin to block Apple Pay in favor of CurrentC? Someone should raise the question w/ Target’s CEO..

  4. RiteAid with its garbage coupon offerings. They NEVER have enough product on their special coupons. It is the classic bait & switch. They get you into their store with ploy in hopes you will buy the other WAY OVERPRICED stale junk products. Go Wallgreens, a better store anyway.

  5. I think the key to the outcome of this competition is the customer experience. If the merchant makes it easy to spend money in her store, customers are more likely to do so than if it is really difficult.

    Apple Pay User Interface: (1) Take iPhone out of pocket. (2) Place next to terminal while holding finger or thumb on the lock button. (3) After you feel it vibrate, put phone back in pocket. (4) Since you have not shared any reusable information with anyone, forget about it. (5) If there is a fraudulent transaction, your bank will have to deal with it.

    CurrentC UI: (1) Take phone out of pocket. (2) Turn it on and unlock it. (3) Make sure that you have a decent connection to the Internet. (4) Locate and launch the CurrentC app. (5) Enter a 4-digit passcode. (6) Use phone to scan a QR code on the point-of-sale terminal. (7) If you can’t get a clear image, manually enter the long code on your phone. (8) In some cases, a QR code will appear on your screen; hold up your phone so the terminal can scan it or enter another long code. (9) Confirm that the transaction was completed. (10) Exit the app. (11) Lock your phone. (11) Put it back in your pocket. (12) Try not to think about all the information you just shared, or the fact that you gave the merchant direct access to your checking account. (13) If there is a fraudulent transaction, it is your responsibility.

    I can guess which system will be more popular with customers.

  6. one more case of open mouth – shoot foot – and then insert said foot in mouth.

    what a bunch of dopes.

    one minor point that should be kept in mind about walgreens – in your indignation with cvs and rite aid, one should not overlook the fact that walgreens was fully planning on a tax inversion strategy, until word leaked out before they could complete the deal and the shit storm of negative reaction caused them to reverse course.

    for the time being… things can change again…. greed knows no limits

  7. > 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.

    Once again, we see the difference between Apple and just about everyone else.

    Apple makes money from selling its hardware products. Apple Pay is a value-added service that improves iPhone customer experience. The service exists to help sell more iPhones, not to collect customer information and solicit business.

    The iTunes Store is also a value-added service that improves customer experience. Although it does make a profit these days, it exists primarily to help sell more Apple hardware. In contrast, Amazon’s equivalent services exist primarily to make a profit selling the media.

    Android does not directly provide revenue for Google; it exists to advertise to users and collect user information. Android’s users are Google’s commodity, not customers. Apple’s software exist to improve customer experience, because that’s what helps sell more Apple hardware.

    Apple does not play by the same rules. In fact, Apple is not even playing the same game.

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