
Apple Pay Faces Challenge as CVS, Rite Aid Reject System - forrest_t
http://www.bloomberg.com/news/2014-10-26/apple-pay-face-challenge-as-cvs-rite-aid-reject-system.html
======
aaronbrethorst
I like how the article never mentions the reception that the competitor,
CurrentC, has received.
[https://itunes.apple.com/us/app/currentc/id912922036?mt=8](https://itunes.apple.com/us/app/currentc/id912922036?mt=8)

Design fail:

    
    
        Why should anyone have to grant access to
        their personal checking account, health data
        and allow tracking of their purchases!? 
    

I wish I could give less stars:

    
    
        This app would only provide me with less
        security and less convenience.
    

Horrible mobile payment:

    
    
        you think Target and Home Depot breaches
        were bad? Wait until those hackers got a
        hold of your bank account and drain it!

~~~
MBCook
Oh but it gets worse.

Apple Pay is very accessible because of it's design, but CurrentC isn't.
[http://stevensblog.org/apple-pay-rejections/](http://stevensblog.org/apple-
pay-rejections/)

But don't worry the CurrentC app is horrible for people without any
accessibility issues. They want your driver's license _and Social Security_
numbers.
[http://twitter.com/hasanahmad80/status/526551322523623424/ph...](http://twitter.com/hasanahmad80/status/526551322523623424/photo/1)

TechCrunch walked through how this terrible app works and what data it wants
including: location (OK), health & medical (WHAT?), browser history, phone &
text logs.

And who needs security? Its privacy policy only shows that it may share data
with carriers, ad networks, consumer data resale, analytics, government, and
others.

[http://techcrunch.com/2014/10/25/currentc/](http://techcrunch.com/2014/10/25/currentc/)

~~~
thinkcomp
Financial account providers are required to ask for personal identifiers as a
result of the USA PATRIOT Act. You have to provide your SSN when you apply for
a credit card or bank account, as well.

As for the rest...yeah, seems a bit much.

~~~
MBCook
I'd forgotten about that. Are they actually providing an account though? I
thought they were just storing a card on file, the way Amazon does. Is it
because they're using ACH?

~~~
manicdee
Yeah, you're providing checking account details, not credit card details. The
system is intended to "cut out the middleman", where the middleman is those
nasty credit card companies taking their cut of every sale.

Perhaps they'll start their own bank so you can open a checking account with
CVS and use that account for your high risk CurrentC trading (NB: there's
already an app on the iTunes App Store called Current C which is a currency
conversion calculator).

~~~
MBCook
I guess if they have ACH access they have everything they need to launder
money so the rules would apply. The only ACH thing I have setup is my paycheck
and it wouldn't have phased me to give my SSN at that time.

This whole thing is just so amazingly tone-deaf of a move. They don't want you
to use Apple Pay, they want you to use something that doesn't even exist
outside private beta, so they take away your choice.

On the other side of the equation, Wells Fargo is offering $20 for trying
Apple Pay with their cards.

[http://www.macrumors.com/2014/10/27/wells-fargo-apple-pay-
cr...](http://www.macrumors.com/2014/10/27/wells-fargo-apple-pay-credits/)

------
Someone1234
So the CurrentC people are trying to assure CurrentC's future by pissing off
the very same companies that they need to authorise their app? That seems like
they're shooting themselves in the foot.

What are they going to do if Apple in particular rejects CurrentC as an app?
Do it via HTML5/WebKit? Cannot see the user experience on that being
particularly good.

Plus as people on Reddit pointed out, with Apple Pay/Google Wallet, the
liability for fraud is still with the banks. With CurrentC you MIGHT be liable
for any fraud in the US (because of how credit and debit fraud is handled).

PS - The name "CurrentC" is just terrible. Least memorable name ever. They
should have just called it "Vanilla."

~~~
Osmium
> So the CurrentC people are trying to assure CurrentC's future by pissing off
> the very same companies that they need to authorise their app?

And also the very people who are most likely to be first-adopters for a new
payment platform...

~~~
omarrr
^^^ This

------
Bud
In order for Apple Pay to be facing a "challenge", wouldn't there have to be,
say, an actual competing product, as opposed to some unwise executive at
RiteAid deciding to unilaterally disable NFC readers that they already have
paid for (amazingly childish) and placed in their stores, along with mumbling
about some maybeware solution that they might ship in 2015?

------
mikestew
Anyone that's been around a while for things like DivX (no, the other one that
the now-bankrupt Circuit City backed) and Plays for Sure (until we yank
support) knows how this is going to end. Though disappointing that those
backing this can't read those same tea leaves, what's really disappointing is
that consumers are just going to have to wait while this plays out to the
inevitable conclusion.

Look retailers, we understand why you're trying this, but snowballs in hell
stand a better chance. Save us all a lot of waiting, and save yourselves some
expense, own up to the inevitable and put the NFC readers back. In the
meantime, expect not another dime from me, as I will actively go out of my way
to avoid you and will actively seek out your competitors who have NFC readers.

EDIT: oh, wait, is it just CVS, RiteAid, and Walmart? So much for my boycott,
as I'm willing to just do without before shopping at any of those three, NFC
readers or not.

~~~
jonlucc
I think the consortium would be much better off asking Apple (and Google) to
work with them on figuring out a way to automatically tie purchases from a
particular store with that store's rewards program. If I don't have to think
about it, I'll gladly pay for my items, opt in to rewards (maybe once per
company) and let them track me at only that company in exchange for the crappy
coupons. They probably don't need my entire bank information, SSN, and DL # to
do that.

------
Eric_WVGG
Why don’t they just call CurrentC “ZuneBucks” or “PaysForSure” so we can get
this over with?

------
ganeumann
Apple faced the same sort of defection with the iTunes Store. Not every music
publisher allowed its music to be sold there at first. Music publishers also
put together competing consortiums to distribute emusic through companies they
controlled. It's perfectly rational for them to want to do this (it's been
said that while more music is bought than ever before, recording industry
revenues have been cut in half) but it seems unlikely that a CVS/Rite Aid
consortium will release a product more popular with consumers than Apple's
might be.

But it still might take several years for other competitors to give up and
join in. And, of course, anything can happen in that time.

------
davidholmesnyc
This sucks. I don't know why the mobile payment space is so competitive. It
would make more sense to me that any retailer would accept as much different
sources and methods of payment as possible to make the purchasing user
experience as seamless and easy to use as possible.

~~~
owenmarshall
That makes sense on a small scale. But with big retailers, the calculus
changes a bit. The data a big retailer gets from my purchase history: when I
come in to the store, what I buy, etc., is potentially very valuable.

CurrentC would allow my purchases to be tracked across multiple major
retailers and aggregated. The value there is _incredible_. Possibly worth more
than the merchandise I buy? Very possibly, I'd think.

------
post_break
Apple Pay worked last week. Google Wallet worked for years. This is really not
looking good for their competing product. Boycotts are starting to trend on
Twitter, and for good reason.

------
georgemcbay
This is a shitty situation for consumers and I think the retailers are making
a big mistake, but it is also somewhat amusing to see so many Apple fans
white-knighting for Apple considering they are a company that has routinely
rejected (on their walled-garden App Store) apps or app updates to already
existing apps because they "duplicate functionality" (read: "compete with our
stuff").

My reaction is similar to when Apple gets sued for patent infringement on dumb
patents -- it still makes me dislike the current patent system for abuse, but
at the same time a part of me thinks it couldn't happen to a more deserving
company in a "live by the sword, die by the sword" way.

------
VLM
"The deadline for merchants to make the switch is October 2015; so far about
220,000 U.S. stores have done so, out of more than 10 million. The upgrade
costs $500 to $1,000 per checkout terminal, according to Javelin Strategy &
Research."

Why not just go to your local office supply store and look up that you can get
a iCT250 for about $200 and from the ingenico website you can read that
specific model "Gives options to accept all forms of payment including MSR,
EMV, contactless and mobile NFC." "credit cards with chips" to the general
public are "EMV" to retailers. I think I saw an ad for Staples for $250 for
this exact terminal. Its a top of the line device and its only $200 to maybe
$300 depending where you buy it. You could probably pay less.

I volunteer part time as treasurer for a non-profit and part of my "volunteer"
work as the local IT expert was researching alternative payment methods for
our fundraisers, none of which we (aka I) decided to implement. Partially
because when you have a bazillion volunteer workers its a miracle if they can
just get the name right on personal checks, there is no way in hell I'm
personally training 50 people to accept 25 different digital payment methods.
Also we keep more cash with our no fee non-profit checking account, so why
make some middleman "rich". Our (edited: fundraiser event) cashflow is barely
in the 5 digit range, and I can imagine orgs much bigger or smaller, or profit
instead of non-profit, might have different end results.

(Edited to add, theres a new alternative digital payment method released
roughly every 3 months, its very trendy. So next fall, that would be roughly
29 possible payment technologies for 50 people thats almost 1500 training
sessions all of which have to be perfect. No thanks!)

------
brighton36
Until there's a system that works for consumers 98% of the time or more,
consumers will continue to reach into their wallets for a plastic card.
Proprietary software vendors are never going to hit that rate of acceptance,
and for the most part, they're all wasting their time with these half-baked
implementations. As soon as a universal open standard of payments becomes
accepted by the big merchants, that's when these mobile payment space will
take off. No one wants to embrace Bitcoin for all the obvious reasons, but
there is no other competing solution, so it'll clearly be the inevitable, if
not reluctant, winner in this market.

~~~
quonn
More likely, Apple and Google will cooperate if they have to. Or Apple will
revert to their old policy and remove Bitcoin apps from the App Store.

~~~
brighton36
ISPs in the 90s never cooperated to form a neutral standard for content design
and layout because there was never a standard that could possibly serve any
one of their interests without coming at an expense to every other member in a
coalition. This early mobile payment space is highly comparable to that
industry. Further, there's a lot more providers in this space than Apple and
Google. Those two have already merged onto a fairly similar NFC standard,
which is about as far as they could go without support from merchants.
Meanwhile, merchants are fairly rapidly adopting Bitcoin.

~~~
luma
> ISPs in the 90s never cooperated to form a neutral standard for content
> design and layout because there was never a standard that could possibly
> serve any one of their interests without coming at an expense to every other
> member in a coalition.

Could you explain this further? What standard would ISPs be developing in the
90s for content and layout?

~~~
brighton36
There never was one, which is the point. Compuserve had a weird compiled
binary format. AOL had a similarly weird proprietary format, Prodigy was a
vector based system that could never work with anyone else, and there were
countless others (Genie, etc). Meanwhile, HTML came along over PPP, and that's
when the entirety of corporate america, and residential dial-up users joined
the network. The same thing is happening now with the mobile payments
industry.

------
ojbyrne
Ok, time to shop at Walgreens.

------
GoldenMonkey
The digital payment dam is about to burst open. These companies are plugging
holes in the dam with their fingers. There's no stopping the digital payment
river.

~~~
pessimizer
Retailers want nothing less than universal digital payments. I'm not sure why
you would think that they wouldn't. This is about Apple's solution vs. their
own solution.

------
asadotzler
How dare the retailers have their own system that tries to cut out the credit
card middleman.

~~~
netcraft
I don't think the issue is that customers don't like competition, its the fact
that they are being hostile towards the ones trying to give them money,
restricting consumer choice and forcing a sub-par solution that is not as
convenient at best and downright insecure at worst.

I think you'd see a similar backlash if CVS decided to take cash only because
they wanted to cut out the credit card middleman.

~~~
Karunamon
At least that would be defensible, and a superior solution to this abysmal
"CurrentC" app!

------
abalone
Basically Walmart has had a vendetta against Visa/MC interchange fees (~2%)
for years and is now at the point of acting irrationally.[1] They sued them to
the tune of billions of dollars and of course that didn't kill them. They got
the Durbin amendment passed and that didn't kill them. And the reason is
simple: Visa/MC actually have consumers allied with them, thanks to things
like purchase protections and reward programs. Consumers like paying with
their existing Visa/MC cards.

So they got a bunch of other big retailers to sign exclusivity agreements to
try to force customers to pay by direct checking account withdrawals (ACH),
bypassing Visa/MC, in order to get mobile pay functionality. It's silly.

They hate Apple Pay because it further entrenches Visa/MC, their nemesis. Much
of the criticism around this has focused on privacy and crappy app design,
which is fair, but really the main motivation here is to kill Visa/MC.

I expect the more rational merchants will adopt Apple Pay once their
exclusivity contracts expire.

On privacy: CurrentC does collect more customer info than Apple Pay (similar
to signing up for a store card), but to be clear, merchants can still track
your purchase behavior with Apple Pay. Apple Pay swaps in a device account #
for your real account #, and that # can still be used to track your purchases
over time. It's primarily a security thing (that # can only be used for
TouchID-authorized payments).

When Apple talks about privacy it's mainly in comparison to other payment
intermediaries (e.g. Google Wallet), i.e. _Apple_ doesn't track your
purchases. With respect to merchants, Apple Pay does hide your real name but
tracking and those annoying register coupons based on your past activity are
still very much possible. And if the merchant ever collected your email at
some point, they could associate it with your device account # just the same
as your real card #, just like before.

This is all a way of saying that MCX's main objective is not to bypass all the
privacy protections that Apple Pay is putting in place against merchants,
because Apple Pay doesn't really do that (apart from your real name). I'm sure
MCX wouldn't mind grabbing more info -- we'd have to scrutinize the privacy
policy -- but the main, longstanding, simmering motivation here is to try to
kill interchange fees.

Unfortunately they are so irrational and short-sighted that they are willing
to make life worse for consumers in the process, even though it has no chance
of succeeding.

[1] "I don’t know that MCX will succeed, and I don’t care. As long as Visa
suffers." \- alleged Walmart CEO quote as reported by
[http://techcrunch.com/2014/10/25/currentc/](http://techcrunch.com/2014/10/25/currentc/)

~~~
MBCook
Is the Apple Pay pseudo-card number constant for each device/merchant? I
wondered if it changed on a regular basis or per transaction (sort of like one
time use card numbers).

I don't blame Walmart for wanting an extra 2% profit, I object to having
things shoved down my throat. Apple actually improves CCs for the first time
in decades and MCX is trying to push a system with less privacy, protections
(direct ACH access? Never), and no actual benefit to me.

Everything they want to do (for me) they can do with the little barcode
loyalty cards or their own app and let me use Apple Pay.

Instead they play cartel.

~~~
pcurve
I do blame Walmart for wanting that extra 2% profit because they want to have
their cake and eat it too.

Remember the time when gas stations charged more for credit card transaction?
Well no more. Rather than fight the uphill battle, gas stations slowly raised
their prices cover credit card transaction fees.

Same thing happened with most retailers. Many used to have $20 minimum for CC
transaction years ago. That slowly went down to $0 for most places. Now you
have people pay for soda with their debit cards.

People forget that retailers benefit tremendously from credit cards because
studies have shown that people spend substantially more when they charge
things on card, versus when they pay cash.

Well, now that Walmart business is hurting, they want to squeeze credit card
companies. Even if they were able to cut CC companies out, the extra profit
would eventually go away through competition.

~~~
abalone
> the extra profit would eventually go away through competition.

That is a nice belief but proven false in practice. In Australia where they
regulated away cc fees, prices did not decline. Merchants kept the margin.
Economics is funny sometimes.

------
MCRed
Headline is misleading. First paragraph makes it clear that these companies
are not "rejecting" Apple Pay (and google wallet for that matter) but are
excluding support for them because they are part of a competing consortium.

~~~
netcraft
Im unclear about the difference - how is turning off support for NFC (and with
it apple pay and google wallet) not rejecting it?

