Apple Pay Walmart Support May Never Arrive
From a list of stores that currently don’t accept Apple Pay as a payment method, Walmart is one of the biggest ones on the list, and it looks like the giant retail chain will never support Apple Pay.
According to Re/Code, Walmart exec Mike Cook stood on stage at a recent Money2020 conference and said that high credit card transaction fees is the main reason why Walmart isn’t supporting Apple Pay.
Credit card transaction fees are fees that stores are required to pay to banks when a credit card is used to buy goods at the cash register. Walmart believes these fees are too high, which is a big reason why the national retail chain is opting for CurrentC, which has payment options that have lower fees than credit card transactions.
CurrentC is a new digital payment method that will launch early next year, and it’s from a group called Merchant Customer Exchange, which consists of a handful of big retail chains, including CVS, Rite Aid, Best Buy, Lowe’s, Sears, and Target.
MCX praises its upcoming payment platform, as it links directly to users’ debit accounts, which bypasses card companies and their transaction fees. However, it’s been stated that it’s not the best solution for the consumer. The system uses QR codes that requires the user to unlock their phone, open up an app, and display a QR code that gets scanned by the pay terminal reader, whereas Apple Pay simply requires users to take out their iPhones and point it close to the NFC terminal with their finger on the Touch ID sensor.
Apple Pay was launched last month and has become the fastest-growing digital payment platform on the market so far.
Apple Pay allows you to store your credit card information on your iPhone and use it to buy stuff at any store that supports Apple Pay. The iPhone 6 has an NFC chip that allows you to tap the pay terminal at a store to instantly buy goods without swiping your credit card. Furthermore, doing this doesn’t give the store your credit card information, so you’re less susceptible to store hacks that steal credit card information, similar to the recent Home Depot and Target hacks.
Apple Pay also works with mobile shopping apps, allowing you to pay with a single touch of the Touch ID fingerprint sensor in shopping apps that support the feature.
While many of these stores that have a contract with CurrentC don’t currently support Apple Pay, it doesn’t look like there are any penalties for stores who break that exclusivity and begin offering Apple Pay. In fact, midwest grocery store Meijer accepts Apple Pay and is a part of the CurrentC program, so it leads the way for other CurrentC stores to follow.
Whether or not CVS, Rite Aid, and other partnered stores will permanently stick with CurrentC is up in the air, as the platform hasn’t even launched yet, but we wouldn’t be surprised to see the platform fail eventually and have these stores quickly switch back to Apple Pay, especially since there aren’t any penalties for companies that want to leave CurrentC and join Apple Pay.
So if you’re wondering why Apple Pay isn’t accepted at more stores than what’s already supported, it’s somewhat due to competition and exclusivity. Merchants believe it’s in their best interest to offer payment methods that benefit them instead of the customers, while other retailers that support Apple Pay think it’s best to offer as many payment methods as possible.
William Hugh Murray, CISSP
11/10/2014 at 12:29 pm
When I was a boy, most retailers had proprietary credit systems. Discover grew out of the Sears system. They abandoned them in favor of the current system because it proved to be more efficient and because consumers preferred it. Perhaps things have changed but I doubt it.
While CurrentC may use QR tags and Barcodes, what defines it is that it is near-cash only, not “credit.” It will be token passing; there is no credit card number to pass. While there will be no credit risk to cover, there will be administrative costs and fraud losses. These merchants may not find these costs negligible. Moreover, they clearly do not want to lose all credit custom.
There is no reason that the token cannot be passed via NFC; the POS devices in all.the participating merchants are already contactless readers equipped. indeed the way that they are going to resist Apple Pay is to turn off those readers (though I think the one in my CVS was active yesterday).
Apple will make the NFC reader available to other wallet systems because their customers will demand it. By the end of 2015, most POS devices will have mag-stripe readers, contactless readers and Mag-stripe readers. Most mobiles will be able to use two out of these three; mine does all three. The consumer, not the merchant, will make the choice.
11/10/2014 at 11:36 pm
Apple Pay may have become the fastest growing (because your just about forced to use it where android your give the option) but it’s still the least compatible digital payment system so far. I have used Google Wallet for over a year now and as long as a merchant has an nfc terminal and it’s set up, it works. The same cannot be said for Apple Pay. As always, they are a year or two behind.