CVS became the second major U.S. drugstore chain to turn off their NFC payment terminals to prevent Apple Pay transactions, in an effort to make their own upcoming “CurrentC” app-based payment system the only option. Rite Aid also turned off NFC payments on their point of sale terminals last week.
U.S. drugstore chains CVS and Rite Aid initially supported Apple Pay—at least unofficially—because both chains had installed NFC payment terminals years ago to work with Google Wallet and other specially designed credit cards supporting NFC tap-to-pay transactions. Google’s NFC-based Wallet never took off however.
After Apple Pay launched earlier this month alongside iOS 8.1, users found that they could make payments using their iPhone 6 and iPhone 6 Plus handsets not only at official launch partners – Including Walgreens, McDonald’s, Macy’s and more – but also at most NFC payment terminals.
Some retailers, such as Best Buy, have simply removed their NFC terminals, while CVS and Rite Aid turned them off to prevent Apple Pay, (and Google Wallet), from working.
CVS and Rite Aid both belong to a group of retailers, including Walmart, Best Buy, Kmart, and 7-Eleven, that has been working since 2012 on CurrentC, a plan to enable payments via a mobile app. The CurrentC app will require iOS and Android users to launch an app a checkout. (The app requires an internet connection, unlike Apple Pay.) The app then produces a QR bar code that retailers then have to scan. (Sounds real smooth, doesn’t it? – Ed.)
Instead of drawing against a user’s credit card or debit card, CurrentC’s QR code draws directly from the user’s checking account, a gift card, or cards issued by the program. Apple Pay and Google Wallet are designed to work with users’ existing debit and credit cards, allowing them to continue to earn reward points, or any other perks they already receive.
Whereas Apple Pay doesn’t supply retailers with any data on customers via their purchases, CurrentC will allow retailers to obtain data on their customers purchasing habits that can later be sold to others.
CurrentC’s claims that “you can pay with peace of mind,” (users’ transactions data will be collected by the retailers’ consortium), fly in the face of recent hacks involving the theft of customer data and account information from retailers. Bad timing at best.
CurrentC hopes to have its barcode app ready to go by next year, however some of the stores involved are already blocking Apple Pay in hopes that users will set up new accounts when CurrentC is ready to go. CurrentC also will allow participating merchants to avoid the transaction charges involved with the use of conventional credit and debit card transactions, bypassing banks completely.