Retailers are resisting Apple’s new Apple Pay technology for mobile payments.
According to multiple reports, major retail chains such as CVS, Rite Aid, and Walmart are disabling their contactless payments systems to thwart Apple’s solution.
It’s all about money of course, and a lot of it. According to Forrester Research, the market for mobile payments is expected to rise from $12 billion in 2012 to about $90 billion in 2017. A good chunk of that money will go to the company that can extract fees from those transactions or cut out the credit card companies, which charge retailers fees.
The Verge reports that the number of retailers supporting Apple Pay is dwindling, with Walmart, Kmart, 7-Eleven, and Best Buy, all expressing their displeasure with a system that piggybacks on their investment in new point-of-sale terminals required to accept contactless mobile payments.
Those retailers that are rejecting Apple Pay–CVS and Rite Aid have reportedly disabled their NFC terminals for the time being–are part of a joint venture called the Merchant Customer Exchange (MCE), which is developing something called the CurrentC platform.
CurrentC is in testing in limited locations around the United States with a full rollout expected by 2015. A press release from MCE states that CurrentC aims to “simplify and expedite the customer checkout process by applying qualifying offers and coupons, participating merchant rewards, loyalty programs and membership accounts, and offering payment options through the consumer’s selected financial account, all with a single scan.”
That approach, which hinges on withdrawing funds directly from the user’s bank account, will essentially eliminate costly credit card fees for retailers. MCE is not supported by any banks or financial institutions.
Apple’s strategy on the other hand leans heavily on support from financial providers. Apple has already pledged to support payments made using card from American Express, Citi, Wells Fargo, Capital One, and Chase. More banks are expected to be added later in 2014.
Shares of Apple were down slightly to $104 in early trading Monday.
Filed Under: Devices
