As exclusivity deals signed with Merchants Customer Exchange in 2012 are about to expire, another major retailer has said it will accept other mobile payment methods. Drugstore chain Rite Aid (NYSE:RAD) will begin accepting Apple Pay and Google Wallet this week, and will later add Google's Android Pay.
Rite Aid was one of staunchest supporters of MCX's CurrentC, and disabled Apple Pay functions last October, as did CVS. The reversal is seen as a blow to CurrentC's prospects, but an endorsement of alternative payment systems in general. Rite Aid will accept CurrentC when the service becomes available.
Others that signed the three-year CurrentC exclusivity deals in 2012 are moving to accept other payment options, including Best Buy and Kohl's. Target has said publicly it wants to start accepting Apple Pay. Walmart, CurrentC's biggest supporter, is also open to accepting Apple Pay, but has not made the NFC upgrade needed to take Android and Apple Pay.
The retailer-backed CurrentC is expected to start testing this month in Columbus, Ohio, in Walmart, Target and Darden Restaurants locations, PYMNTS.com reported. Outlets of Dunkin' Donuts are also said to be among the early CurrentC tests.
In an effort to avoid the retailer-abhorred interchange fees, MCX does not include major credit card companies in its offering, encouraging consumers to link checking accounts, store gift cards, and private-label credit and debit cards. This feature has been connected to former Walmart CEO Lee Scott's "holy war against interchange fees." Plus, CurrentC was victimized by a well-publicized hack last year, which added to the challenges in getting underway.
Rite Aid will now also accept tap-and-pay credit and debit cards, the company said in a statement.
"Increasingly, consumers are actively seeking out and incorporating mobile technology into many facets of their life, including their shopping and purchasing decisions," said Ken Martindale, CEO of Rite Aid stores and president of Rite Aid Corp., in a statement. Rite Aid has almost 4,600 stores in 31 states and the District of Columbia.
"By accepting mobile payments, we're able to offer Rite Aid customers an easy and convenient checkout process, which we know is important to them. Investing in mobile technologies is just one piece of Rite Aid's evolving digital strategy and we will continue to explore, test and implement innovative technologies that will help us to better serve our valued customers," he said.
While Apple continually releases names of banks and merchants added to its acceptance ranks—CEO Tim Cook has said that 1.5 million locations will accept it by the end of the year—numbers regarding consumer usage are hard to come by, Fortune reported. There are several widely varying research studies.
Auriemma Consulting Group reported some positive findings: Apple Pay usage in the U.S. is growing, driven by increased frequency of transactions and an expanding base of iPhone 6 users. Apple Pay and the upcoming Samsung Pay can only be used on the manufacturers' latest devices.
The consultancy interviewed 500 iPhone 6 and 6+ owners, and found that 42 percent have used Apple Pay, according to American Banker. These users said they consider Apple Pay to be more than a novelty, reported a growing use at points of purchase, and predicted room for future growth.
Auriemma also found satisfaction with Apple Pay to be exceptionally high, with 98 percent of in-store users and 93 percent of in-app users reporting satisfaction. These shoppers are making an average of 2.6 weekly in-store purchases and 2.3 weekly in-app purchases.
Meanwhile, a Gallup Panel Web study reported that only 2 percent of Americans actually use digital wallets, while Blackhawk Network said 25 percent of all smartphone owners are now using digital wallets.
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Only 2% of U.S. consumers use digital wallets