Despite all the hoopla around the launch of Apple Pay, some major retailers are not allowing customers to use the tech giant’s new mobile payments system.
According to media reports, national drug stores CVS and Rite Aid are modifying or disabling their NFC (near field communication) readers, the devices needed for Apple Pay to function.
Customers trying to use the new system with their iPhones are finding that major retailers are not cooperating. The biggest reason: These retailers, including Walmart, Kmart, 7-Eleven and Best Buy, are developing a competing mobile payments app called CurrentC, which is expected to debut next year. These retailers formed a joint venture in 2012 to partner on CurrentC.
After Apple announced Apple Pay’s launch last month, Walmart and Best Buy told the Wall Street Journal that their customers would not be able to use their iPhones to access the new system.
This week, Rite Aid disclosed in a leaked memo that it was disabling NFC readers to prevent not only Apple Pay functionality, but that of other competitors including Google Wallet and SoftCard, which is supported by the major wireless carriers.
Banks and credit card companies have embraced Apple Pay. But without support from retailers Apple will have a tough time establishing widespread use of its much-heralded system.
Why would retailers opt for CurrentC over Apple Pay? The simple answer is cost savings. No bank backs CurrentC. That’s because it eliminates the middleman — and credit card processing fees that banks charge merchants.
The CurrentC app, when it launches next year, won’t replace your plastic credit card. It will withdraw directly from your checking account when you pay at the cash register with smartphone.
Apple’s website says that its mobile payments system is supported by just 34 retail partners. Five of those listed are different versions of Foot Locker. One is Apple itself.