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Retailers Dropping Apple Pay, Other Mobile Payment Systems to Avoid Credit Card Swipe Fees?

The recent introduction of Apple Pay was widely described as the dawn of a new era for smartphone payments. But within a week, two major pharmacy chains, Rite Aid and CVS, rejected Apple’s version of the future: Both disabled Apple Pay (as well as other tap-to-pay mobile payments systems Google Wallet and Softcard).

Retailers Dropping Apple Pay, Other Mobile Payment Systems to Avoid Credit Card Swipe Fees?

CVS hasn’t publicly explained itself. Rite Aid spokeswoman Ashley Flower said, “We are continually evaluating various forms of mobile payment technologies, and are committed to offering convenient, reliable and secure payment methods that meet the needs of our customers.”

That’s not the whole story. Objections to Apple Pay aren’t actually about convenience, reliability or security—they are about a burgeoning war between a consortium of merchants, led by Walmart, and the credit card companies. Rite Aid, CVS, Walmart, Best Buy and about 50 other retailers have been working on their own mobile payments system, called CurrentC. Unlike Apple Pay, which works in conjunction with Visa, MasterCard and American Express, CurrentC cuts out the credit card networks altogether. The benefit to the merchants is clear: They would save the swipe fees they now pay to the credit card companies, which average about 2 percent of the cost of transactions.

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CVS hasn’t publicly explained itself. Rite Aid spokeswoman Ashley Flower said, “We are continually evaluating various forms of mobile payment technologies, and are committed to offering convenient, reliable and secure payment methods that meet the needs of our customers.”

That’s not the whole story. Objections to Apple Pay aren’t actually about convenience, reliability or security—they are about a burgeoning war between a consortium of merchants, led by Walmart, and the credit card companies. Rite Aid, CVS, Walmart, Best Buy and about 50 other retailers have been working on their own mobile payments system, called CurrentC. Unlike Apple Pay, which works in conjunction with Visa, MasterCard and American Express, CurrentC cuts out the credit card networks altogether. The benefit to the merchants is clear: They would save the swipe fees they now pay to the credit card companies, which average about 2 percent of the cost of transactions.

Read Full Article

Retailers Dropping Apple Pay, Other Mobile Payment Systems to Avoid Credit Card Swipe Fees?