Over the weekend, CVS disabled NFC support on its POS machines at all of its nationwide store locations, effectively blocking out support for NFC-based mobile payment solutions like Apple Pay and Google Wallet in the process. Together, CVS and Rite Aid are the first two stores who have taken pro-active measures to disable support for Apple Pay after customers had already began using the payment platform there successfully. Unfortunately, they may not be the last.
As we've indicated previously, the impetus for CVS and Rite Aid's decision to disable Apple Pay (and any other mobile payment platform for that matter) stems from their support of CurrentC. CurrentC is an upcoming mobile payments platform developed by a company called Merchant Customer Exchange (MCX). MCX enjoys the backing of a number of top tier retailers, including Walmart, Best Buy, CVS, 7-Eleven, and dozens more.
But just what is CurrentC, exactly? Moreover, does it pose a legitimate competitive threat to Apple Pay?
To help answer those questions, Josh Constine of TechCrunch over the weekend took an in-depth look at CurrentC and provides us with a number of previously unknown details surrounding the competing payment platform.
With respect to stores like CVS and Rite Aid disabling support for Apple Pay, that stems from contractual obligations MCX members have made not to support competing mobile payment platforms.
In January 2013, Fierce Retail reported MCX had been asking retailers in 2012 to pay a big upfront fee from $250,000 to $500,000 to get on board, and sign three-year mobile payment app exclusivity deals with MCX. Retailers who signed up may have had a one-year grace period from the start of their exclusivity contract to bail out of the deal. If Apple Pay gains steam early, some retailers might look to take advantage of this option to ditch MCX. However, if deals were signed in 2012, that grace period is long gone but retailers may be coming up on the end of their exclusivity agreements even though CurrentC hasn't launched yet.
Well, so much for open competition and giving consumers the option to choose how they'd like to pay for items.
And while Apple Pay was designed to be a completely seamless, intuitive, and unobtrusive process, CurrentC sounds like a usability nightmare.
Instead of relying upon NFC and credit cards, CurrentC relies upon QR codes and is linked to a user's checking account. Yep, you read that correctly... QR codes.
When it's time for a user to check out, they request to pay with CurrentC. The consumer then unlocks their phone, opens the CurrentC app, opens the code scanner, and scans the QR code shown on the cashier's screen. In some case, the reverse may happen where the consumer's CurrentC app displays a payment code and the cashier scans it. If a QR code can't be generated, a manually entered numeric code may be offered.
Rather than sending the customer's financial data over the air, transactions trigger the transmission of a token placeholder. This is then securely converted by the financial institution to process the ACH payment and charge the user.
MCX will likely position CurrentC as a mobile payment platform designed to provide customers with greater access to in-store discounts and loyalty rewards programs. While true, make no mistake about the true aim of CurrentC; giving retailers more control of and access to shopper information and buying habits.
CurrentC notes it may share info with your device maker, app store, or developer tool makers. Oddly, it will collect health data. Precise location information is used to verify you're at the retailer where you're making a transaction, and if you opt in it can be used for marketing or advertising.
And if that weren't enough, CurrentC requires users to enter in their drivers licence number and social security number. The following photo was taken straight from CurrentC's support website.
Taking a look at Constine's full article, it's truly hard to fathom any scenario in which CurrentC actually gains traction with consumers. Especially when measured against the consumer-oriented Apple Pay, CurrentC, both in design and in operation, appears to be more appealing for big time retailers than for actual consumers.
This brewing battle between competing mobile payment platforms may play out rather slowly. CurrentC isn't slated to go live until early 2015 and it'll likely be a few good months before we can accurately gauge the potential long-term impact Apple Pay will have on the marketplace. Maybe Apple Pay will revolutionize mobile payments. Maybe it won't. But it's hard to imagine CurrentC, despite its support from big name retailers, having any sort of widespread impact on mobile payments. If anything, the recently released details of CurrentC only serve to highlight how much more compelling and user-friendly Apple Pay is.
Comically, the CurrentC app on iTunes already has a solid 1-star rating. One reviewer writes:
This app would only provide me with less security and less convenience. Marketed as a better solution than carrying around credit cards, it then lists features that are worse than any card I've ever heard. I don't want my checking account information (yes they want to be directly linked to your bank) and for some reason health data out in some retailer's cloud systems. One star is too good for this thing. And policies around stores using this payment system lock out any other mobile friendly ways of paying, like anything that uses NFC, for no other reason than that they can't track data on you as well if you don't use their system. That locks out things like Google wallet and Apple Pay. Here's a novel idea, take my money however I want to hand it you when I want to pay for something. If you don't want my money, well, I guess good luck with that business model. This app and the incorporated system symbolizes the epitome of not realizing anything about consumers' rights or wants to the point of actually being the opposite of what the people want.
For an additional take on CurrentC, make sure to check out a great piece from Rich Mogull over at TidBITS.