Report: Retailers’ Apple Pay rival may be delayed

CurrentC, a new wireless payment service backed by the major retailers and intended to compete with Apple Pay, may not see a wide public launch later this year as previously planned, according to a new report.

Brian Mooney, CEO of Merchant Customer Exchange, or MCX, the company that is developing CurrentC, told Recode that the company is considering delaying launching the service. MCX will inaugurate a public test of CurrentC in Columbus, Ohio “in a few weeks,” he said. Depending on how that test goes, the company could push back the nationwide launch.

“Certainly, going faster is always better,” Mooney told Recode. “But we’re going to do it right.”

A delay would represent a significant setback for MCX and its affiliated merchants, which include Walmart, Gap, Bed Bath & Beyond and Target. Apple Pay launched last fall for iPhones. Android Pay, Google’s rival service and the successor to Google Wallet, is expected to launch later this year for Android-based devices. So too is Samsung Pay, a similar service for Samsung phones.

All the services allow consumers to make payments at retailers and restaurants using smartphones and, in some cases, smartwatches. Typically, the services store account information from credit, debit or loyalty cards and transfer information needed to make payments inside an app on a smartphone. They transfer payment information using an NFC radio to compatible terminals. The services are generally considered to be more secure than using physical cards, because they don’t typically transfer the actual credit card number when making a payment, instead sending a unique code for each transaction.

Retailers had been hoping that the move to wireless payments might allow them to decrease their dependency on credit cards from Visa, Master Card and others. Merchants pay credit card processors a fee for each credit or debit card transaction, and those fees cut into their profits. Instead of making payments from traditional credit card accounts, wireless payment services could be configured to directly draw from bank accounts or use retailers own store-issued cards.

Along those lines, according to Recode, early testers of CurrentC are unable to use the app to make payments with credit or debit cards. Instead, they can only use store-issued credit or gift cards or checking accounts. Mooney told the site that CurrentC could allow consumers to use traditional credit cards in the future, but didn’t commit to doing so.

Apple Pay users have found that they can’t use the service at many places. That’s partly because many retailers still need to upgrade their payment terminals to accept wireless payments. Many will likely do so later this year, as new rules take effect that will change who bears the cost of fraudulent transactions. If a retailer has an older style payment terminal that can’t read the computer chips found in newer cards, they’ll have to accept liability for fraud if a consumer tries to pay with one of those newer cards. In addition to being able to read computer chips, many of the newer terminals can also accept wireless payments.

But another reason why there are so few places that accept Apple Pay is because many of the larger retailers signed exclusivity agreements with MCX that would only allow them to accept wireless payments from CurrentC. Those deals are starting to expire and some big retailers affiliated with MCX, including Best Buy and Rite Aid, have recently announced that they will soon be accepting Apple Pay.

Image courtesy of MCX.

 

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