Retailers Turning Off Apple Pay

The biggest news in payments over the past week hasn't been Apple Pay, but rather the retailers that first accepted but no longer accept Apple Pay.

CVS and Rite Aid are in the news for this:

http://www.usatoday.com/story/money/business/2014/10/26/cvs-follows-rite-aid-shuts-off-apple-pay/17959213/

The various takes on the story are a story unto itself.  Balanced news can be found here:

http://www.businessweek.com/articles/2014-10-27/why-rite-aid-and-cvs-stopped-taking-apple-pay

Here is a snippet from that piece:

That’s not the whole story. Objections to Apple Pay aren’t actually about convenience, reliability, or security—they are about a burgeoning war between a consortium of merchants, led by Walmart (WMT), and the credit card companies. Rite Aid, CVS, Walmart, Best Buy (BBY), and about 50 other retailers have been working on their own mobile payments system, called CurrentC. Unlike Apple Pay, which works in conjunction with Visa (V), MasterCard (MA), and American Express(AXP), CurrentC cuts out the credit card networks altogether. The benefit to the merchants is clear: They would save the swipe fees they now pay to the credit card companies, which average about 2 percent of the cost of transactions.

Unbalanced news can be found here on Gizmodo:

http://gizmodo.com/how-corporate-greed-is-trying-to-kill-apple-pay-1651233601

Here is a snippet from that piece:

When Apple Pay launched last week, it was a huge step towards the pay-with-your-phone future that's been in the works for years. But a few big retailers like Walmart, Best Buy, and CVS want to blow the whole thing up and replace it with something shittier, because they don't care about you at all.

Here is Karen Webster's take:

http://www.pymnts.com/news/2014/the-real-reason-rite-aid-dumped-apple-pay/#.VE6XyCLF_9Y

Here is a snippet from her piece:

Last week, it was announced that Rite Aid abruptly deactivated its terminals and would no longer be able to accept Apple Pay. There was speculation swirling that it was because of concerns over security or data privacy, both totally ludicrous claims/spin given Apple’s highly secure payments scheme and total inability to see transaction or cardholder data. Say what you will about Apple Pay and its chances of success, but it is a highly innovative and secure method of payment using the mobile device.

...

But I also offer that horror movie playing between Treasury/Marketing folks at every CurrentC/MCX merchant could get pretty gruesome. And, I think that this could even foreshadow the second big post Apple Pay shift in payments – the unraveling of CurrentC.

For my part I was at Walgreen's over the weekend to pick up a prescription for my daughter.  The payment terminal was advertising Apple Pay.  Right above that was a placard on the wall that read "Please Turn Off Cell Phone".  Well, we have a ways to go yet.

Quite a lot of news this past week huh?

TechCrunch has some inside views of the CurrentC app.  Wow.  How did they get their hands on this stuff?

http://techcrunch.com/2014/10/25/currentc/

Happy Reading,

J.W. Gant