Retail partners of the Merchant Customer Exchange consortium – the power behind the CurrentC mobile payments solution – are contractually required to use the CurrentC system, and can incur large fines if they use a competing solution, such as Apple Pay, in their stores.
Citing anonymous sources with knowledge of the matter, The New York Times reported on Tuesday that MCX partners are forbidden from using mobile payment alternatives like Apple Pay, lest they incur high penalty fees for broken contracts.
If the sources are correct, this explains why such retail giants as Walmart, CVS, Rite Aid, and Best Buy refuse to allow the use of Apple Pay to pay for goods and services at their checkouts.
Walmart commented on the situation yesterday, saying MCX only has consumers best interests in mind by not allowing Apple Pay or other mobile payment solutions.
“There are certainly a lot of compelling technologies being developed, which is great for the mobile-commerce industry as a whole. Ultimately, what matters is that consumers have a payment option that is widely accepted, secure and developed with their best interests in mind. MCX member merchants already collectively serve a majority of Americans every day. MCX’s members believe merchants are in the best position to provide a mobile solution because of their deep insights into their customers’ shopping and buying experiences.”
MCX is scheduled to bring its CurrentC mobile payments system online some time in 2015. The mobile app-based solution – which avoids paying credit card network fees by linking directly to a consumer’s checking account – generates a unique QR code upon checkout, which a cashier must then scan from the screen of the device. The store’s point-of-sale terminal can also generate a code to be scanned by the customer.
CurrentC also carries the advantage, (for the merchant) of enabling purchasing tracking and processing for store loyalty programs, coupons and special offers.
To contrast, Apple Pay is an anonymous payment method that works seamlessly with compatible NFC payment terminals. iPhone 6 and iPhone 6 Plus users simply place their handset on the terminal and touch their finger to the phone’s Touch ID sensor. Payment is then made via a one use tokenized payment code. No credit card or personal information is transferred, the cashier doesn’t even see your credit card.
Apple CEO Time Cook noted on Monday that users had activated more than one million cards with Apple Pay in the first 72 hours of availability.