Like many people I’ve been following the ongoing development of Apple Pay with interest, but it seems that some retailers aren’t too keen on the new solution – so much so they’ve created their own.
In America, the Merchant Customer Exchange (MCX), a consortium of the country’s biggest retailers including Walmart and Target, has clubbed together to produce a rival to Apple Pay called CurrentC. The technology behind CurrentC is said to be slower and clunkier than Apple Pay but it does offer consumers loyalty rewards and initially, stores that are part of MCX won’t accept Apple Pay.
The main reason why these retailers are opposed to Apple Pay is all to do with credit card fees. Retailers have to pay credit card companies between 1.5 and 3% of every card transaction that’s made in their stores, which amounts to a significant amount of money over a year. Moreover, Apple Pay runs on card networks so if it becomes popular, the likes of Visa and MasterCard would only grow stronger and could potentially increase their fees, something which these retailer are afraid of. With CurrentC, they wouldn’t have to pay half as much as they currently do.
Another factor is customer data. Retailers want more information about their customers for marketing purposes but Apple Pay does not even share credit card numbers, meaning that retailers have little way of knowing who their customers are or what they’re buying. CurrentC, on the other hand, will provide them with far more data through its loyalty rewards programme.
These big retailers have to accept that mobile card payment is here to stay and is only going to become more and more widespread among consumers. While CurrentC may save them a lot of fees, you could argue that by blocking Apple Pay from their stores and offering what sounds like a worse solution in its place, MCX risks turning its customers off and driving them to rivals who do accept Apple Pay.
If retailers really want to take on the might of Apple, they’ll need an innovative mobile payment concept with a robust infrastructure behind it to succeed. Meanwhile, MNOs need to be asking serious questions about their own mobile payment strategy as yet more businesses move in on something which should be their bread and butter.