During Apple’s fall event, they excitedly announced Apple Pay, a service that would allow iPhone owners to use NFC technology to make payments with over 200,000 merchants. However, many big names are left off that list.
Merchants like CVS and RiteAid are boycotting the use of Apple Pay and other mobile payment methods that use NFC technology. Instead, they are teaming with other retailers like Wal-Mart and Best Buy to develop a mobile-payment system called CurrentC. Over 50 retailers, including the aforementioned, comprise MCX or Merchant Customer Exchange, the muscle behind the CurrentC app. The biggest obstacle for retailers boycotting Apple Pay boils down to the fees charged for using credit cards. Businesses absorb an interchange fee each time a purchase is made with a credit card. The fees can range from 1%-3% of the total purchase. If you’ve ever been offered a discount for paying with cash, you’ve found your reason why. CurrentC seems to be the workaround that big retailers like Sears, Target, and Kmart are using to save big bucks.
CurrentC works differently from Apple Pay by directly connecting to a user’s bank account and using ACH to transfer money from the buyer’s bank account to the retailers, at little to no cost. It also uses a QR code scanning method for payments instead of the one-time token system utilized by Apple Pay.
CurrentC is looking to be Apple’s main competitor when it comes to mobile payments. Though not yet widely released, CurrentC has already faced a major hacking that occurred last week and compromised the e-mail information of its users.
Many are criticizing CurrentC’s method of payment, saying that it puts consumers at a greater risk of fraud since it is linked to a personal bank account rather than a credit card. Credit card fraud can usually be cleared up rather easily, while bank account fraud can take a significant amount of time to investigate.
So who’s the winner? Well, it still remains to be seen. Apple Pay has been getting stellar reviews from those actually able to use it, and users activated over one million credit cards with the service upon its launch. CurrentC is currently being tested in very small markets and is expected to be available to the public early next year.
Image courtesy of ecreditdaily.com.
