Retailers are disabling NFC readers to shut out Apple Pay

[techbeck]

There's a lot of hype around Apple Pay right now, but not everyone is on board with the new mobile payments system. In fact, a significant number of merchants, including heavyweights like Walmart, Kmart, 7-Eleven, and Best Buy, are in outright competition with Apple Pay. The retailers, through a joint venture formed in 2012, are building their own mobile payment app, called CurrentC. It's expected to launch next year. In the meantime, these retailers have no intention to support Apple Pay.

 

Following Apple's announcement last month, both Wal-Mart and Best Buy confirmed to The Wall Street Journal that customers would not be able to use the system in their stores. Earlier this week, a leaked internal memo from Rite Aid revealed that the drug store chain was modifying or disabling its NFC readers, preventing access to Apple Pay (and other systems, like Google Wallet and wireless carrier-backed SoftCard, which also depend on the contact-less technology). A representative later confirmed the news to iMore. Today, CVS followed suit and shut out Apple Pay, according to reports. Both will support CurrentC on launch next year. The companies have not immediately returned requests for comment.

 

More...

http://www.theverge.com/2014/10/25/7069863/retailers-are-disabling-nfc-readers-to-shut-out-apple-pay

[Hurmoth]

CurrentC is so incredibly convoluted. Who thought this was a good idea compared to NFC? TechCrunch has a really good article about how ridiculous CurrentC is: http://techcrunch.com/2014/10/25/currentc/

 

The only reason they're doing this is to avoid credit card transaction fees, but in the process, they're making the system incredibly insecure, complex and inconvenient.

 

I truly hope Google Wallet & Apple Pay prevail here*.

 

*I want NFC to prevail as a technology, so if Microsoft supports NFC as well, I want them to prevail as well. I just want CurrentC to fail on its merits.

[Dutchie64]

[Buttus]

ugh!  the only place i could see this working would be somewhere like a restaurant, where they could print the QR code on the receipt and you could scan it and give the pay code to the waitress.   

 

unless they make some kind of portable NFC scanner so you don't have to let them take your phone to the register.....

[ATLien_0]

Never tried using my Windows Phone Wallet, but if those retailers go with their own standard, does this shut out Google Wallet and Windows Phone Wallet users as well? 

[Hurmoth]

Never tried using my Windows Phone Wallet, but if those retailers go with their own standard, does this shut out Google Wallet and Windows Phone Wallet users as well? 

Yes. If CurrentC wins, it'll kill Google Wallet, Windows Phone Wallet, and Apple Pay.

[streetw0lf]

From what I gather, to the consumer this functions like a debit card, funds are taken from their accounts immediately.  There is no grace period, like credit cards, to pay your bill which for me is a big plus with credit cards.  Unless I got the whole thing wrong.

[ATLien_0]

Yes. If CurrentC wins, it'll kill Google Wallet, Windows Phone Wallet, and Apple Pay.

Well talk about ruining standards. If they kill Windows Phone wallet the chances that they will licence the tech to Microsoft will probably be pretty slim seeing how things already are on Windows Phone. 

It would be nice if Google and Apple were to jump in on this and stop this from happening. My banks and credit cards are already on board with ApplePay which is a big win for Apple, and Google Wallet/Windows Wallet seems to work pretty well as well on NFC. Last thing we need is a secondary standard to confuse the consumer

[PGHammer]

From what I gather, to the consumer this functions like a debit card, funds are taken from their accounts immediately.  There is no grace period, like credit cards, to pay your bill which for me is a big plus with credit cards.  Unless I got the whole thing wrong.

And why shouldn't retailers look out for their best interests?

 

Apple Pay requires Apple hardware, does it not?  Google Wallet requires Android, and Windows Phone Wallet requires Windows Phone - that alone means that all three are either semi-proprietary or fully proprietary.  What is needed is a non-proprietary NFC standard.

 

The issue (for retailers) is that they have to pay fees to the banks (or credit card consortia - which is exactly what MasterCard and VISA are) and are stuck waiting for the float for their payments.  Margins in retail are already razor-thin (and getting thinner).  CurrentC is one understandable approach to end-run all that - lower fees, and no float.  Is CurrentC also hardware-neutral?  If so, that is a major advantage compared to Apple Pay (or Google Wallet, or even Windows Phone Wallet)

Well talk about ruining standards. If they kill Windows Phone wallet the chances that they will licence the tech to Microsoft will probably be pretty slim seeing how things already are on Windows Phone. 

It would be nice if Google and Apple were to jump in on this and stop this from happening. My banks and credit cards are already on board with ApplePay which is a big win for Apple, and Google Wallet/Windows Wallet seems to work pretty well as well on NFC. Last thing we need is a secondary standard to confuse the consumer

Google Wallet and Apple Pay already compete with each other - can you use Google Wallet with Apple Pay hardware?  If your bank is onboard with Apple Pay, that would seem to require that you (as a customer of that bank) purchase Apple hardware to use Apple Pay - so much for a non-proprietary standard.  Interoperability is, in fact, the issue.

[Hurmoth]

And why shouldn't retailers look out for their best interests?

 

Apple Pay requires Apple hardware, does it not?  Google Wallet requires Android, and Windows Phone Wallet requires Windows Phone - that alone means that all three are either semi-proprietary or fully proprietary.  What is needed is a non-proprietary NFC standard.

 

The issue (for retailers) is that they have to pay fees to the banks (or credit card consortia - which is exactly what MasterCard and VISA are) and are stuck waiting for the float for their payments.  Margins in retail are already razor-thin (and getting thinner).  CurrentC is one understandable approach to end-run all that - lower fees, and no float.  Is CurrentC also hardware-neutral?  If so, that is a major advantage compared to Apple Pay (or Google Wallet, or even Windows Phone Wallet)

From a merchant perspective, no, you're wrong. It doesn't require any special hardware except for an NFC reader. The readers at Rite-Aid and CVS were working just fine with Apple Pay even though they weren't launch partners.

 

The problem is, CurrentC is a ridiculously stupid solution to a the problem. It would be better to work with Apple to allow direct bank access and pay them a small fee for ACH transfers (which they're going to have to pay anyway, even with CurrentC) than to do this insecure and overly complicated way.

 

When it?s time for a user to check out, they request to pay with CurrentC. The consumer then unlocks their phone, opens the CurrentC app, opens the code scanner, and scans the QR code shown on the cashier?s screen. In some case, the reverse may happen where the consumer?s CurrentC app displays a payment code and the cashier scans it. If a QR code can?t be generated, a manually entered numeric code may be offered.

 

 

[edit] Google Wallet & Apple Pay use the same hardware on the merchant side. That is all we're talking about here. Stop trying to introduce facts that have NOTHING to do with this discussion. Merchants will still have to buy new hardware for CurrentC, so if they already have NFC terminals, this actually ADDS more expense to their POS.

[PGHammer]

From a merchant perspective, no, you're wrong. It doesn't require any special hardware except for an NFC reader. The readers at Rite-Aid and CVS were working just fine with Apple Pay even though they weren't launch partners.

 

The problem is, CurrentC is a ridiculously stupid solution to a the problem. It would be better to work with Apple to allow direct bank access and pay them a small fee for ACH transfers (which they're going to have to pay anyway, even with CurrentC) than to do this insecure and overly complicated way.

 

When it?s time for a user to check out, they request to pay with CurrentC. The consumer then unlocks their phone, opens the CurrentC app, opens the code scanner, and scans the QR code shown on the cashier?s screen. In some case, the reverse may happen where the consumer?s CurrentC app displays a payment code and the cashier scans it. If a QR code can?t be generated, a manually entered numeric code may be offered.

 

pay-with-currentc.png

 

[edit] Google Wallet & Apple Pay use the same hardware on the merchant side. That is all we're talking about here. Stop trying to introduce facts that have NOTHING to do with this discussion. Merchants will still have to buy new hardware for CurrentC, so if they already have NFC terminals, this actually ADDS more expense to their POS.

There is still the matter of the float - which CurrentC avoids (and neither Apple Pay or the current non-NFC system avoid).  Merchants/retailers HATE having to wait for payment - especially since the biggest advantage thereof belongs to the bank.  Do you hate retailers that much?

[streetw0lf]

So how do you dispute a purchase as you can do with a credit card?  Large retailers screw over the consumer and more so their employees.  And don't you think the merchant fees are built into their prices?  My heart bleeds for the big box stores.  The little guy I have compassion for.

[Hurmoth]

There is still the matter of the float - which CurrentC avoids (and neither Apple Pay or the current non-NFC system avoid).  Merchants/retailers HATE having to wait for payment - especially since the biggest advantage thereof belongs to the bank.  Do you hate retailers that much?

What I like is consumer convenience. I'm the consumer, I want to pay however I want to pay. Apple Pay is more convenient and secure than CurrentC. So yes, I do hate retailers that don't give me choice on how secure I want to be.

 

CurrentC is all about being able to track me and my purchases so they can sell that data and make more money off of me.

[neufuse Veteran]

Why do we need to make it Apple Pay or Google Wallet? why don't we just call it what it is... and let the credit card companies deal with the process. They already had NFC in master cards and visa cards for a long time now (At lease since 2007) why do we need to remake and rebrand what already existed? This CurrentC stuff is just stores colluding to try to fix the payment market so they benefit only. While doing that making it utterly more complex then it needs to be. Just make a wallet app call it a wallet app and nothing else, make all systems support this universal wallet app, which just stores NFC information and you can use it only when you have your phone unlocked and tap on the card you select then tap transmit information... there it's secure and no different then using your NFC enabled credit card, minus the selection step... no annoying branding... no convincing people apple had it first when it's been around since the early 2000's

[ATLien_0]

I was under the impression that pay systems that support ApplePay which is NFC based still supported other NFC payments from Google Wallet and Windows wallet, is this not the case?

[ctebah]

I was under the impression that pay systems that support ApplePay which is NFC based still supported other NFC payments from Google Wallet and Windows wallet, is this not the case?

 

It is.  NFC based merchant readers are all the same when it comes to NFC functionality.  The difference comes from the phones functionality.

[jakem1]

Why do Americans insist on making everything so complicated?  This sounds like the problem you have with multiple carriers embracing different mobile frequencies/technologies.  Just agree on one standard and lose all the proprietary nonsense. 

 

Here in the UK there's a single standard for contactless payments that is widely available and very simple to use.  You can use it to buy things in any shop that supports it, the readers are being rolled out to more and more shops every day and you can even use it to do things like pay for travel on buses and trains.  It's simple and there's no need to worry about competing proprietary versions that work in some places and not others.

[Hurmoth]

Why do we need to make it Apple Pay or Google Wallet? why don't we just call it what it is... and let the credit card companies deal with the process. They already had NFC in master cards and visa cards for a long time now (At lease since 2007) why do we need to remake and rebrand what already existed? This CurrentC stuff is just stores colluding to try to fix the payment market so they benefit only. While doing that making it utterly more complex then it needs to be. Just make a wallet app call it a wallet app and nothing else, make all systems support this universal wallet app, which just stores NFC information and you can use it only when you have your phone unlocked and tap on the card you select then tap transmit information... there it's secure and no different then using your NFC enabled credit card, minus the selection step... no annoying branding... no convincing people apple had it first when it's been around since the early 2000's

No one has said anything about Apple had it first. Where are you even getting this from? :rolleyes:

 

I was under the impression that pay systems that support ApplePay which is NFC based still supported other NFC payments from Google Wallet and Windows wallet, is this not the case?

All systems that support NFC payments also support Apple Pay as well. Both Rite-Aid and CVS worked with Apple Pay even though they weren't official Apple Pay partners. And that's my point. These stores already supported NFC payments before Apple Pay and they worked with Apple Pay and all of the sudden they deactivated those terminals so they could put in new terminals for CurrentC next year.

 

So they had a system that was working, but because they're part of MCX they turned it off so they could spend MORE money on new terminals that won't launch until next year.

 

All in an effort to track my purchases across a group of other participating merchants so they can sell my data to advertisers and each other and not have to pay card transaction fees.

 

All in the name of the almighty dollar. Screw customers for their own bottom line.

 

 

[edit] In today's stratechery newsletter: https://stratechery.com/membership/ Ben Thompson explains MCX's partnership costs:

[ATLien_0]

It is.  NFC based merchant readers are all the same when it comes to NFC functionality.  The difference comes from the phones functionality.

So we have 3 mobile OS's that already have built in support for these pay systems and yet these retailers and this CurrentC want to mess that up. Talk about ruining standards

[ctebah]

So we have 3 mobile OS's that already have built in support for these pay systems and yet these retailers and this CurrentC want to mess that up. Talk about ruining standards

 

Everyone wants their own standards, can't blame them for that.  But it's the tracking of sales and selling customers data that is very appealing to certain companies.  In the future I can see our personal data being more expensive than the merchandise we buy.

[Hurmoth]

Everyone wants their own standards, can't blame them for that.  But it's the tracking of sales and selling customers data that is very appealing to certain companies.  In the future I can see our personal data being more expensive than the merchandise we buy.

Exactly.

 

MCX will allow the 50 current retail members, and any future members, to share and sell the data they've collected on us with each other and of course advertisers. That'll make them a crapload more money than any savings in card transaction fees they're paying. Being a member of MCX probably eats up a lot of that savings anyway.

 

What they should do is get all the members together and change the agreement that they signed so they can still offer NFC is the retailer wants to and let customers chose what mobile payment method they want to use. Don't force us into one or the other when there's already a perfectly acceptable standard that's been around for a very long time, NFC.

[ctebah]

Exactly.

 

MCX will allow the 50 current retail members, and any future members, to share and sell the data they've collected on us with each other and of course advertisers. That'll make them a crapload more money than any savings in card transaction fees they're paying. Being a member of MCX probably eats up a lot of that savings anyway.

 

What they should do is get all the members together and change the agreement that they signed so they can still offer NFC is the retailer wants to and let customers chose what mobile payment method they want to use. Don't force us into one or the other when there's already a perfectly acceptable standard that's been around for a very long time, NFC.

 

I agree, and I think in the end the customers will speak with their wallets, or in this case, smartphones.  If two retailers can offer the same product with the same price and I can use my iPhone at one of them, then that's the one I'll go with.  Specially if the other one is going to sell my data down the road to another retailer.

[neufuse Veteran]

No one has said anything about Apple had it first. Where are you even getting this from? :rolleyes:

 

All systems that support NFC payments also support Apple Pay as well. Both Rite-Aid and CVS worked with Apple Pay even though they weren't official Apple Pay partners. And that's my point. These stores already supported NFC payments before Apple Pay and they worked with Apple Pay and all of the sudden they deactivated those terminals so they could put in new terminals for CurrentC next year.

 

So they had a system that was working, but because they're part of MCX they turned it off so they could spend MORE money on new terminals that won't launch until next year.

 

All in an effort to track my purchases across a group of other participating merchants so they can sell my data to advertisers and each other and not have to pay card transaction fees.

 

All in the name of the almighty dollar. Screw customers for their own bottom line.

 

 

[edit] In today's stratechery newsletter: https://stratechery.com/membership/ Ben Thompson explains MCX's partnership costs:

rjonesy_2014-Oct-27.jpg

I didn't say Apple said that, I am talking about how people perceive it... you know how many people I've ran into have said look at this awesome tech Apple came up with?... It boggles my mind they didn't notice its existence for many years before Apple announced they support it in their product...

[Kravex]

Apple's a victim of it's own success and what it did with that success in the past when it dominated (and dictated too) the music industry. Any company is rightly weary of letting Apple set a standard in things in the future.

[Jason S. Global Moderator]

let me preface my post by saying 'tap-to-pay' stuff is very neat. but why is it so hard to carry a credit card?

 

i have Google Wallet set up on my phone and have never had the opportunity to use it. where are all the retailers???