Unless you’ve been completely sequestered away from technology news as well as mainstream news, you probably have heard of the new Apple iPhone 6 and 6 Plus as well as Apple’s new Point-of-Sale (PoS) ecosystem called Apple Pay.  Apple Pay became available on October 20th, coinciding with the release of iOS 8.1.  Apple Pay only works on the iPhone 6 and 6 Plus.  It will be compatible with Apple Watch when that rolls out in early 2015.

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Apple Pay.pngApple Pay is not the first PoS / mobile wallet to deploy. Google Wallet has been out for several years; however, many have deemed this a “failure.”  I wouldn’t go near as far as that. It was just a bit before its time, yet Google Wallet has persisted. Since that time, countless individuals have paid for goods and services at various brick and mortar locations around the globe using Google Wallet.  But what that has done is establish a number of PoS terminals where you might see a little Wi-Fi symbol with a hand holding a device (known as the “contactless payment symbol”).

There are anecdotal reports where people have completed purchases at retailers (not on Apple’s supported location list), using Apple Pay, on terminals that show the contactless payment option – e.g. those that currently support Google Wallet for payment from Android devices (KitKat 4.4 & above). This is not official and not confirmed, but it certainly shows that if Apple and Google would actually collaborate, their NFC-enabled devices would work in even more retailers.

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Unfortunately, over this last weekend, a number of retailers began blocking Apple Pay and Google Wallet on their PoS terminals.  In many cases, both Apple Pay and Google Wallet were working fine (even though Apple Pay may have not officially been supported).  This started with CVS and Rite Aid and then extended to 7-11, Kohl’s, Lowes, Gap, Dunkin’ Donuts, Sam’s Club, Sears, Kmart, Bed, Bath & Beyond, Banana Republic, Stop & Shop, Wendy’s along with almost all of the major US gas station chains as well as many more. These companies will be supporting an alternative solution called CurrentC to launch in 2015.  CurrentC does not use NFC, but QR codes to be scanned by the mobile device at check-out time. Many technology press articles cite CurrentC being less secure than Apple Pay or Google Wallet (one says it “kind of sucks”).  TechCrunch noted that CurrentC (really Merchants Customer Exchange or MCX) is an attempt, spearheaded by Walmart, to reduce or avoid credit card fees among other revelations.  They imply that CurrentC is much more difficult to use than the NFC-based, contactless options.

CurrentC-Logo.jpgThe actions taken by MCX member companies has riled a lot of NFC (Google Wallet, Apple Pay and of course Softcard [Android only, currently]) users who were just fine with NFC-based contactless payment options that quite a few of these retailers supported. I think these retailers are taking a step backward, as the NFC-based PoS payment options did provide the level of security needed to take definitive steps to overcome the preponderance of retail hacking attacks that we’ve seen over the last few months. My bank just sent me a new Debit card, as I had used my old one at Home Depot during the time period that retailer was hacked. If I had, instead used a mobile payment option (PayPal works there), that would not have been an issue. In fact, if any major retailer, who has previously been hacked (that means you: Target, Home Depot, Neiman-Marcus, and many others) are NOT rolling out support for contactless payment options via high-security solutions such as Google Wallet and Apple Pay should be held suspect.

But, despite all of the posturing by MCX, Google, Apple, as well as the quieter Softcard, and PayPal, this means that contactless payments are now really off and running. For full disclosure, I do not yet have my Apple 6; however, it is on order. Once I do receive it, I will be experimenting with Apple Pay at a number of locations; including those that display the contactless payment symbol, but are not on the “Apple list” as well as those on the list.  I have paid with PayPal via my mobile a few times and with the old Square app (BTW: I’d love it, if Square would somehow enable support for contactless payments, going forward – that would help them AND consumers a great deal)./wp-content/uploads/2014/10/soft_card_571805.png

For the record, I think that CurrentC will ultimately fail as consumers will gravitate towards solutions that offer them security, ease of use, and privacy – areas where CurrentC is somewhat lacking, according to what I’ve seen. We’ve seen this before with mobile messaging – that’s why there are now a variety of messaging options besides SMS (WhatsApp, Kik, as well as SMS-enabled OTT messaging apps like Pinger, TextMe, and others) – consumers drive what is adopted in this mobile economy. Many, if not all of the retailers will ultimately come back to NFC-based contactless payment options and I think they’ll be welcomed. [NOTE: October 2015 marks the beginning of the time when a new payment system called EMV will usher in the new era of “chip-and-PIN” credit cards in the United States. It is very likely that the vast majority of these PoS terminals will also support contactless payments – good news for Apple Pay, Google Wallet, Softcard and other NFC enabled payment solutions – unless, by some odd reason, they remain blocked, as the retailer might still be hamstrung by MCX and CurrentC.]

In a way, we in the US and other markets where Apple Pay (as well as other contactless payment options) are catching up with markets such as Japan and Korea, where contactless payments are much more ubiquitous. Still, I think the age for mobile Point-of-Sale purchasing has finally arrived. Late, but it is finally here.

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  1. William Dudley Post author

    In the last day or two since I published this blog entry, the divide between CurrentC (MCX) and Apple Pay is heating up and MCX/CurrentC is looking worse and worse.

    First of all, Apple Pay noted that over 1 million users signed up for Apple Pay in the 1st 3 days. Secondly, just today the MCX CEO published a blog to try to avert some fears and answer questions about the CurrentC/MCX situation.

    I do like this Forbes article:  Blocking Apple Pay Is A Terrible Strategy For CurrentC Merchants – Forbes (definitely worth a read)

    And now, MCX has been hacked!  Apple Pay Rival and Walmart-backed MCX Hacked, User Emails Snatched – Forbes

    I think Apple CEO Tim Cook put it best:  “But in the long arc of time, you only are relevant as a retailer or merchant if your customers love you.”  If you read comments around many of these articles, sentiment is running well against CurrentC (which won’t be ready until 2015 vs. Apple Pay — ready now!) as well as these retailers who have the PoS technology to support Apple Pay, yet disabled it because they are part of the MCX consortium.

    [11/3/2014: More follow-up]  MCX continues to back-peddle.  Now they are saying that the exclusivity expires in “months” rather than “years.” It will be interesting to see how many retailers re-activate Apple Pay and Google Wallet, once this period expires, given consumer outcry.  But will it be too late?  Of course, it is a simple matter for these same retailers to provide loyalty cards, coupons and other discounts through Apple Passbook as well as Google Wallet.  So, CurrentC doesn’t give consumers THAT much of a benefit, in my opinion.  More from The Verge Article.

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  2. William Dudley Post author

    [Update: 11/21/2014] Today, in a CNN Money article, it was announced that Square will soon accept Apple Pay (in 2015).  This is good news, especially for many SMBs that rely on the popular Square Reader for credit card transactions. Hopefully, this upgrade will be offered at a low cost to retailers (which should also support new EMV standards, required by October of 2015).

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