When Apple Pay launched last week, it was a huge step towards the pay-with-your-phone future that's been in the works for years. But a few big retailers like Walmart, Best Buy, and CVS want to blow the whole thing up and replace it with something shittier, because they don't care about you at all.
This weekend, Rite-Aid and CVS stores were suddenly—and suspiciously—unable to take Apple Pay. It quickly came to light that they had, in fact, disabled their NFC payment set-ups altogether. At its heart, Cupertino's new toy is just a new flavor of the same NFC payment schemes—Google Wallet chief among them—that have existed for years, but only now were they being nuked.
If giving customers less payment options instead of more—and cutting oneself off from the system that might finally make NFC payments widespread—seems like an odd move for major retailers, you're right! The future just took a major step forward, and retailers are taking the opportunity to turn tail. What gives?
A Power Play
Rite-Aid and CVS grabbed the headlines this weekend, but they're just two of the retailers that are part of a group called the Merchant Customer Exchange. This organization is full of big-name retailers like Walmart, Best Buy, Lowe's, and pretty much every other brick-and-mortar giant that hasn't already collapsed under its own weight.
What's brought them together, other than a creeping fear of their own obsolescence? A scheme to avoid paying credit card fees on the millions of transactions they process every day. One that requires them to circumvent Apple Pay and other NFC technologies with a system of their own devising called CurrentC. And make no mistake, while CurrentC hasn't launched yet, it's an anti-consumer mess.
Apple Pay and Google Wallet use NFC to make paying with credit cards easier, which means your life is better but the fees Walmart et al pay to MasterCard and friends remain in place. CurrentC, meanwhile, wants you to buy toilet paper with direct payments from your bank account and QR codes. QR codes. It makes your life more complicated so that multi-billion dollar companies can shave a few pennies off of each transaction.
This is the future according to CurrentC:
TechCrunch has some details on the inner workings of the unreleased CurrentC and it reads like a horror story. The first step to using CurrentC is to plug in your bank account so retailers can avoid pesky fees. If you were wary about sharing your credit card numbers after all that Target stuff, surely you'll jump to throw your bank account info into this app!
When it's time for checkout, users would have to unlock their phones, open up the CurrentC app, open the QR code scanner, and scan a QR code off the cashier's screen. And if for some reason that doesn't work, you'd be prompted with a numeric code that you can just type in by hand. Convenient!
The reason CurrentC's payment method is so ass-backwards is because the people behind it don't give a shit about you. Sure, CurrentC plans to offer a few useful features—like wrapping customer loyalty cards right into the payment process—but nothing can excuse such a horribly user-unfriendly experience. Given the choice between CurrentC and Apple Pay, or Google Wallet, or whatever else comes down the line, you'll chose the NFC option every time. Unless maybe you are the CEO of Best Buy.
That's why MCX wants to take that choice away from you. Internal memos leaked to Slashgear confirm that Rite-Aid's move to block NFC payments is a strategic move to try and choke out Apple Pay before it can preemptively kill CurrentC. Employees are even instructed to plug the upcoming mobile wallet while at the same time apologizing for not taking Apple Pay.
It's a shitty move, but maybe not even of Rite-Aid's accord; reports suggest that MCX members have already signed exclusivity contracts. It's possible they've already sold their souls to CurrentC long again, and now MCX is just making sure folks are following through. CVS, for instance, just put out a statement that it "can't" accept payments via NFC, but that it's considering other options. Hmm, I wonder what those could be?
Apple Pay is scary to these guys specifically because it's good. It's scary because it has a chance. Google Wallet, ISIS-cum-Softcard and other mobile payment systems have remained fringe enough that MCX apparently wasn't troubled by them, but Apple Pay is the final push that could—and probably will—put NFC over the top, not only helping Apple Pay but every other NFC-based technology. And these guys see that.
It's not that the retailers of MCX shouldn't try to offer their own system. By all means! Competition is great. But the reason they're not letting CurrentC show up side by side with Apple Pay is that they know full well that Apple Pay will win by a massive margin. In fact, it's more than likely that given the choice between CurrentC and just using a dumb credit card like some sort of payments caveman, people will reach for the plastic.
It's a wildly customer-hostile move; MCX seems pretty willing to go to the mat on this one just to squeeze some more money out of each transaction to the point that they're actually willing to make it harder for people to give them money.
In the meantime it's us, the customers, who suffer. We're on the cusp of the future of payment, and these retailers are more than reluctant, more than stubborn; they literally want to undo years of progress to help pad out their margins. So after years of waiting for the tech to arrive, all the pieces are in place for a mobile payment future, and the one thing left standing in the way is greed. That's a shitty reason to get trapped in the past.
Illustration by Tara Jacoby