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US retailers blocking Apple Pay to boost alternative payment app

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Apple Pay

A group of retailers in the USA are shutting out Apple Pay by modifying, and even disabling, their NFC readers.

Top firms like Wal-Mart, Best Buy, Rite Aid, and CVS are all in on the coup to overthrow Apple’s contactless payment system.

The reason behind the corporate aggression is clear – the companies all banded together in 2012 to work on their own payment system.

CurrentC, a joint-venture mobile payment system boasting some of America’s biggest retailers as backers, should be landing next year – in direct competition with Apple Pay.

Both Wal-Mart and Best Buy recently confirmed to the WSJ that they were intentionally barring customers from using Apple’s service in their stores.

Rite Aid, a leading US pharmacy chain, was outed as participating in the block thanks to a leaked memo that suggested it was actually disabling NFC readers.

CVS, another pharmacy, has reportedly also joined the commercial boycott. It’s set to get behind CurrentC as soon as it becomes available in 2015.

While Apple hoped it would revolutionise brick-and-mortar payments across the world, it’s very much struggling to woo retailers.

Its own website lists a mere 34 partners – small arms on the corporate battlefield of America.

Other firms partnered with CurrentC include fast-food chain Wendy’s, 7-eleven, Sears, Gap, Dunkin’ Donuts, and ExxonMobil.

We’re not yet sure whether these companies will be binning off Apple Pay.

It’s not only Apple Pay that’s suffering either, with other contactless payment systems also shunned – Google Wallet included.

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Everlast

October 27, 2014, 11:57 am

This is not a clever move.
So several chains are blocking Google Wallet and ApplePay, hoping to put their own payment solution on mobile phones next year ?!?
Why do they think their applcation will not be blocked as a result on 90% of mobilephones held by Android and iOS is beyond me.

Kuzma86

October 27, 2014, 12:07 pm

Free market...

Mike Walker

October 27, 2014, 6:32 pm

I don't know about the US but in the UK this would not be allowed under the competition commission, I'm sure apple will complain to whichever regulatory body operates over there.

Hamish Campbell

October 27, 2014, 8:57 pm

I was thinking that too, although presumably there needs to be a deal in place between the shop and the payment provider? I'm just thinking of cards like american express and mastercard which not all shops choose to support, presumably due to the fees involved.

Paul

October 27, 2014, 10:57 pm

fair play

Sterling Archer

October 28, 2014, 7:39 am

Apparently the app pulls your health data and the t&c leaves high liability for fraud to the user, if someone else gets a hold of the phone. Besides it is a clunky system where you have to scan a QR and then the cashier has to scan a QR. Let's see what the consumers think of this, and what does a payment app need health info for?

Jmac

October 28, 2014, 9:06 am

Right, but the stores are blocking (say) AmEx because they object to the relatively higher fees, not to artificially stifle competition so they can promote their own alternative.

Jmac

October 28, 2014, 9:13 am

Fair enough, but a totally unregulated free market is always going to be vulnerable to abuse by the biggest players, who have enough influence to crush competition. I'm sure many good ideas have been killed this way. Fortunately Apple (and Google, since my understanding is that Google Wallet is also effectively blocked by stores crippling their NFC readers) isn't a scrappy upstart with no resources - it's one of the biggest companies in the world, with a ruthless track record of litigation and deep enough pockets to stand up to even the likes of Walmart.

I'm just waiting for the change to the terms of business of the App Store and Google Play so apps like CurrentC (which deserves nothing but contempt, from what I can see, for an awful name and clunky implementation) are in breach and will then be unilaterally removed.

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