Self-interested retailers continue to fight against Apple Pay and, ultimately, their own customers

“We believe Apple’s Apple Pay represents significant progress for mobile-wallet penetration, with strong support from the payment networks and issuing banks and promising results reported in a consumer survey we conducted three months after its introduction,” Gil Luria and Aaron Turner, Wedbush analysts, write for Barron’s. “However, we believe Apple Pay’s success will continue to be impaired in the U.S. as retailers see it as a threat and continue to build an alternative payment infrastructure that will serve their needs, not Visa/MasterCard and the banks. We believe that the dismissal of U.S. retailer efforts by investors may be more a result of payment industry groupthink than an observation of current trends.”

“Our consumer survey of 562 Apple iPhone 6 users indicates early reactions to Apple Pay are positive, with 20% already using Apple Pay either in-store or in-app. Half of the rest of iPhone 6 users indicate they have “not gotten around to it,” which shows the potential for further penetration. In spite of limited availability of locations and some inconsistent experiences with loading cards and paying in-store, 75% of iPhone 6 users intend to use Apple Pay more going forward,” Luria and Turner write. “However, we believe Apple Pay will not be successful in the U.S. until retailers broadly embrace it, which has certainly not been the case so far. Apple has only added a handful of retailers in the first three months (beyond those that were already near field communication-enabled) and some retailers (Wal-Mart Stores, CVS Health, and 7-Eleven) have even been vocal about blocking Apple Pay. Our survey shows that consumers conducted half their in-store transactions at only five retailers. More surprising was the slow in-app adoption, with 60% of transactions happening in only three apps, half of which were in Apple’s own app.”

Luria and Turner write, “We believe retailers are concerned about new charges for tokenization as well as the mix shift to credit, but also about topics such as control over their own data. In the name of security, Apple Pay eliminates the retailers’ ability to capture customer information that can be used to provide a richer ‘Amazon-like’ consumer interaction.”

Read more in the full article here.

MacDailyNews Take: If you want Apple Pay at recalcitrant retailers like Walmart, CVS, 7-Eleven, etc. you must refuse to shop in those stores and go elsewhere, preferably where Apple Pay is accepted (shop at Walgreens instead of CVS, for example).

Malignant shitholes like Walmart only understand one thing: Loss of revenue. Send them a message. Hit them where it hurts.

Oh, and Merry Christmas, peace and joy to all!*

*who support Apple Pay

Related articles:
Apple Pay has strong momentum; took 1% of digital payments in November – December 20, 2014
What Apple Pay means to Bank of America: Security – November 6, 2014
Apple Pay is nirvana for (smart) retailers – November 6, 2014
Entrepreneur warns retailers, restaurants, bars: Do not wait, jump on the Apple Pay bandwagon ASAP – November 5, 2014
Apple Pay fuels usage of long-moribund Google Wallet – November 5, 2014
After CVS and Rite Aid blocked Apple Pay, Schubert law firm launches antitrust investigation – November 4, 2014
Sorry, Walmart, CVS, Rite-Aid et al. — Apple Pay and NFC have already won – November 4, 2014


    1. Mac plus, ““In the name of security, Apple Pay eliminates the retailers’ ability to capture customer information…”” and eliminates the ability to provide crappy security so the stores customers credit card info gets stolen.

      Apple Pay. protecting your credit info.

      Just saying. LOL

      1. “Just saying. LOL”

        Can’t you say something that you actually believe in rather than just ‘saying’ some random thought that you haven’t thought through or actually mean? Are you just a ‘drive by poster’ who is just here to stir the pot? Stand up for what you say or don’t say it.

        Just meaning every word. Seriously.

      2. Interestingly this past week here in UK the Government has told the credit card companies to consider the introduction of tokenisation as a means to reduce fraud. I think the concept is on a role and the information gathering side will have to work separately through the likes of iBeacon type technology.

    2. Also, customer data can be captured by countless other means – surveys, customer loyalty cards, inventory, security cameras, and more. By trying to piggy back customer data collection on top of their payment methods, retailers will be subjecting customers to enormous risks of identity theft. They should just make payments as safe and secure as possible and look elsewhere for customer data.

      1. Exactly! When they say they can’t capture “customer data” with Apple Pay, they really mean they can’t capture one specific thing: your credit card number. So what? They still have loyalty cards if they want to associate you with a purchase.

        Also, the “token” is just another credit card number. If you use Apple Pay, you’ll see each receipt has the same 4 digits for the credit card number. So why can’t they just associate the token number with your purchase?

        This doesn’t have anything to do with capturing customer data. It’s simple greed. The retailers don’t want to pay credit card fees and are fantasizing about a future without credit cards. Apple Pay (and to a lesser extent, Google Wallet) is seen as a threat because it further ingraines credit card usage into our buying habits.


    3. Probably a bigger issue is that of fees. Apple Pay does not change the fee structure. Their proposed system would.

      I currently pay @2% of my gross credit card sales in fees. That is $25,000. per year. I would like to have an option to reduce those fees. (I have tried many other processors and they all charge about the same!)

      1. Um, if they manage to eliminate credit card fees, none of that money’s going to you. The retailers want to charge the same price they’re charging now, but keep all the margin for themselves.


    4. When using Apple Pay at Walgreens, you are obligated to input your phone number along with the transaction. This gives them customer information. (It also annoys me that the Apple Pay transaction isn’t as effortless as advertised.)

      1. You’re only obligated to enter your phone number if you want to use their loyalty card and have lost the physical card. You can just skip the phone number step if you don’t care about the discounts.


      1. And a lot of poor people are getting ripped off by Walmart.

        Walmart’s specializes in selling the cheapest possible, most poorly made, Chinese manufactured shit from the lowest bidders.

        A Walmart purchase might seem like a great deal at the moment of purchase: Who doesn’t like saving a couple bucks when shopping, especially when money is tight? Then very quickly, your Walmart purchase falls apart or breaks because it was cheaply made shit. You need a replacement, so your poor ass goes back into a Walmart to spend more of hard earned money investing in yet another future landfill resident. Walmart wins, and poor people are once again screwed over the total cost of ownership. Malignant shitholes is exactly what those places are.

    1. Walmart is capitalism. That statement is the most communist thing I’ve heard from MDN. If people who want to use Apple Pay, of others who have their noses in the air don’t shop there, they will continue to thrive, or maybe not. If not, they will change or go out of business. What’s not to like about that?

  1. The unfortunate fact is that often, Walmart is the only place where I can find some things conveniently. Because Walmart is hellbent on making their customers use debit instead of credit, I always refuse to run my debit card as debit. Instead I purposefully process my payments as credit. This makes them pay the processing fee. For most of my technology purchases, I order online through Newegg,, or Amazon. Because of this I can always find exactly what I want rather than settle for what’s in stock.

    1. My preferred payment option is Apple Pay.

      And as you said, there are somethings I can not find elsewhere, so for those minimal situations, I have bought an AMEX Serve card. I can add funds to the card as I need them from my iPhone, so I keep the balance on it as close to $0 as possible. The added benefit of a Serve card is – narrow minded merchants like Walmart ended up paying multiples more in transaction fees to AMEX, than they would for my Visa, MasterCard or Debit card that I have loaded on my Apple Pay.

      Since Apple Pay was released, I have been in my local Walmart exactly 2 times – versus multiple times per week before Apple Pay was released. The majority of my shopping is now done at the local Meijer that does accept Apple Pay, and where I now frequent sometimes multiple times per day.

        1. AMEX Serve is a preload card – I don’t think preload cards can be entered into Apple Pay, nor have I ever tried.

          The Serve card is for places that don’t take Apple Pay, so I really don’t have a need to add it to Apple Pay.

    2. Howie, my friend, it is unfortunate that you use credit. . . because Walmart actually pays MORE in fees to use your card as a DEBIT card than as a credit card. My office pays less when a client chooses to use their card as a Visa/Mastercard credit card by about 0.5% than when they choose to use it as a direct debit to their bank account. Why? Because the credit card companies know they have an opportunity to charge the customer up to 29.9% interest on the unpaid balance if they customer does not pay off the card within the grace period! That is a LOT more profit to be made there. . . so the Credit Card issuers will subsidize the processing of CREDIT cards but the banks who pay instantly by debiting a customers bank account will not. The use of a DEBIT card is an expense for them. . . it is merely a convenience service for their account holders. For example, in my office, Credit Cards cost 1.6% , while Debit cards are 2.1% of the face value of the transaction. I would bet that Walmart probably gets a better volume discount than I can get, but the principle is the same. That is why Credit Card companies can give spiffs such as frequent flyer miles, or even cash back, while you seldom see such spiffs for debit cards. If you REALLY want to sock it to them, use Discover (high cost) and American Express (really high cost). There usually is a per transaction fee, as well. . . and the processing company also usually charges a statement fee.

  2. I already don’t shop at shithole Walmart. I have refused to shop there because they blantantly rip off IP and send it to China to be made. They are the most un-American Company bar none.

  3. Note sent to CVS today….let’s all do the same…

    “I’m going to switch my business to Walgreens in 2015. Your insistence on fighting the use of Apple Pay makes no sense in a world where retailers have proven over and over that you are incapable of securing my payment information. Apple Pay represents a significant step forward in security and I will shop where retailers respect my privacy. I hope you change your stance on this matter so that I can return to shopping at your store.”

  4. I think theses guys are overly pessimistic where many were overly optimistic when Apple Pay was announced. Reality falls somewhere in between. Don’t know why anyone would expect to be able to declare winners and losers two months after introduction.

  5. Most merchants can tell to the dollar what their profit is. They may also have an idea, (deliberately overstated), of losses from store theft. Few though, have any idea, nor the mechanism to calculate, “Lost” business and subsequent loss of profit.
    Through hubris and arrogance, they assume their profit is all it can be, then tinker with the vagaries of “marketing” to see what works to bolster profit.
    They will lean over the counter saying, “I’m sick to death of telling people, there’s no demand for that item” until their eventual and deserved collapse.

    1. I once tried to buy an air cleaner at a chain parts store for my very popular model of Japanese small pickup. I found the empty spot on the shelf where it should have been. I asked the clerk if he had more somewhere and he replied that they were out of them. I asked when they would have more and he replied that they got a new shipment every Tuesday.

      I said, “It’s Wednesday morning and you’re out.”

      He said, “Yeah, we only get two per week.”

      I replied, “Why don’t you order more than two?”

      He replied, “Why would I do that? Two per week is all we ever sell.”

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