CVS, Rite Aid disconnect Apple Pay

Both CVS and Rite Aid drugstore chains are taking heat for first accepting, then declining to accept the new Apple Pay (NASDAQ:AAPL) mobile payment system. The retailers, both part of a consortium developing a competing virtual payment system, disabled Apple Pay at stores.

CVS and Rite Aid are among 220,000 U.S. retailers that already have the technology in place to enable customers to use Apple Pay or similar services to make a purchase by waving their smartphones, reported Bloomberg. But the two retailers were not among the specific chains named earlier this month when Apple debuted the payment system.

Apple Pay works with NFC POS terminals and now allows shoppers to pay with Apple Pay at retailers including Macy's (NYSE:M), McDonald's (NYSE:MCD), Target (NYSE:TGT), Walgreens (NYSE:WAG) and Whole Foods (NASDAQ:WFM). For now, it works only with the iPhone 6 and 6 Plus.

CVS and Rite Aid are a part of the Merchant Customer Exchange (MCX) group that has been working to launch its own mobile payment system to help bypass credit card companies. The competitor, known as CurrentC, is collecting retail partners and positioning itself as a formidable competitor, thanks in large part to its big-name partners: Walmart (NYSE:WMT), Target and Lowe's.

Apple Pay still requires retailers to pay swipe fees, but the story is quite different for CurrentC. 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.

Some analysts and consumers are embracing virtual payments due to the vulnerabilities in using credit cards during these retail data breach-prone times.

For more:
-See this Bloomberg article

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