Industry News

Making sense of the battle between Apple Pay and CurrentC


For the second week in a row, Apple Pay has monopolized headlines in the world of mobile payments – but this week for reasons the world’s biggest tech firm is probably not very happy about.

The weekend following the October 20th launch of Apple Pay, word came that some of America’s largest retailers had hurriedly disabled the near-field communications (NFC) features on their cash registers to prevent customers from using Apple Pay, which relies on the short-range wireless technology to connect with point of sale terminals.

After a bit of frenzied speculation by the tech press, it quickly emerged that the reason for the standoff is that the retailers – among them dominant national pharmacy chains CVS and Rite Aid – are part of a consortium called the Merchant Customer Exchange (MCX) which developing its own platform for mobile payments. The firms that had signed up had agreed to exclusively use MCX’s “CurrentC” mobile payment solution, prohibiting them from accepting customer payments via Apple Pay. Meanwhile, it turned out that the sudden turning off of NFC capabilities happened because retailers didn’t expect that Apple Pay would “automatically” work on their POS systems. (CurrentC works with QR codes rather than NFC.)

The situation has naturally raised a host of questions for both users and merchants, and will likely continue to do so.

Does this mean Apple Pay is doomed? Hardly. Even though by some measure user adoption of Apple Pay has been notably slow, it would be silly to count Apple out, just as the backing of retail giants like Walmart will help push CurrentC along regardless of the service’s technical or business-model shortcomings. This is why Cellum has pledged to integrate Apple Pay into its solutions.

Why are these retailers trying to build their own mobile payment systems? There are several reasons, one being a desire to encourage consumers to use a payment method which allows merchants to lower the amount they pay in transaction fees (CurrentC would be directly linked to users’ bank accounts rather than credit or debit cards). They are also keenly interested in collecting as much details on users’ shopping behavior as possible, data that Apple and other outside mobile payment services would not pass on to them.

Are consumers actually happy to scan QR codes and register their bank account details with apps like CurrentC? Despite some harsh commentary on QR codes in the US tech press during the fracas, there is little indication that consumers reject QR codes, or adding bank account details to trusted apps. Indeed, Cellum Global continues to enthusiastically support QR in and beyond the retail setting, believing QR can play an extremely valuable role. Likewise for the registering of bank account information: from the end-user’s point of view, the essence of a good mobile payment app one which gives the user the freedom to register as many payment instruments as technically feasible.

Is it really so important for merchants to be able to control data gained by mobile payment apps on their customers’ shopping behavior? Cellum believes that the answer to the question is so obvious that it is surprising so many people are asking it. Even leaving aside the phenomenal possibilities offered in the area of loyalty and couponing, it would be very short-sighted for merchants to pass up the chance to enhance their understanding of and communication with their customers because a third-party mobile payments provider wants to hoard and ration data.