The launch of Apple Pay this week has thrust mobile payments into the spotlight, illuminating not just the new payment platform and its promise, but also a competitive platform being developed by a group of merchants.
Together, Apple Pay and CurrentC have managed to become the equivalent of an internal industry struggle spilling out into a public street.
Apple Pay's early performance dominated the national news cycle with one report in particular capturing the public's attention: CVS and Rite Aid disabled the Apple Pay function on POS terminals. The two retailers, part of the Merchant Customer Exchange (MCX), have pledged to exclusively use CurrentC.
CurrentC is the product of the MCX, a group of retailers that includes some very heavy hitters like Walmart (NYSE:WMT), Macy's (NYSE:M), McDonald's (NYSE:MCD), Target (NYSE:TGT), Walgreens (NYSE:WAG) and Whole Foods (NASDAQ:WFM).
So when Apple Pay ran afoul of this group, the inside story of how retailers are angling to release their very own payment system and circumvent swipe fees became fodder for public consumption.
Apple Pay works with NFC-equipped POS terminals and allows shoppers to register credit cards and pay by tapping a smartphone at checkout. CurrentC, however, works only with an individual user's bank account, like a debit card. The result allows retailers to avoid paying credit card-issuers' swipe fees.
CurrentC works with all phones, not just the newest model iPhones, making it available to a much bigger audience. The app works with QR codes recognized by most existing checkout scanners and lets shoppers use coupons and other digital offers.
Retailers like CurrentC because it not only allows them to avoid swipe fees—although there are plans to add credit card payment options in the future, according to MCX—but it integrates with loyalty programs, something Apple Pay does not yet do.
But it also requires a pledge of exclusivity by the retailers in the MCX. Something that doesn't allow them to accept Apple Pay, hence CVS and Rite Aid's POS adjustment.
The NRF was moved to weigh in on the perceived battle between MCX and Apple, issuing the following statement:
"Merchants large and small make business decisions every single day based upon what makes the best sense for the business, their associates and most importantly, their customers. The payment systems they decide to implement are no different. Data security is paramount, but so is flexibility, cost and ease of use.
"There are a number of new technologies reaching the marketplace, and a number of other systems on the horizon. It is easy to second guess why a specific retailer chooses one technology or another, or what payments they will or will not accept, but you can be sure that the bottom line consideration is what is best for their company and their consumer."
*This story originally appeared in FierceRetail's sister publication, FierceRetailIT.
Walmart says no to Apple Pay
Apple Pay is here
Apple's iPhone 6 stealing retail's holiday thunder
Apple Watch, Pay will change retail
Apple puts NFC security front and center