Walmart is one of several high-profile retailers that belong to MCX, a consortium of retailers that have partnered together to create their own mobile payments service called CurrentC. Due to this commitment, the big-box retailer has opted against supporting Apple Pay in its stores. A new report offers a big reason why: high credit card transaction fees.
Re/code offers some insight this weekend into why Walmart “will never accept Apple Pay,” with a big part of the reason being that Walmart believes that the fees merchants are required to pay banks when a credit card is swiped in their stores is too high. Meanwhile, MCX’s CurrentC has payment options that carry lower fees than credit card purchases.
Given that Apple Pay supports both Visa and MasterCard, which set the fees that Walmart and other MCX retailers believe is too high, the report claims that Walmart feels the iPhone-based payments service does not support its fight for the payments fee structure to be changed.
“Since Apple Pay supports Visa and MasterCard credit cards, Walmart and other MCX retailers believe the iPhone-based payments service just perpetuates the traditional payments fee structure they despise,” claims Re/code. “The MCX’s CurrentC app, on the other hand, favors transactions funded by store-branded cards or a connection with a customer’s checking account — all of which carry lower fees than credit card purchases.”
Look no further than the video below in which Walmart assistant treasurer Mike Cook and Visa executive Jim McCarthy had a heated discussion about credit card fees at a recent payment conference called Money2020 to see the tension between the retailer and credit card networks.
Merchant Customer Exchange (MCX) consists of several other retailers, including CVS, Rite Aid, 7-Eleven, Best Buy, Lowe’s, Publix, Sears, Shell, Sunoco and Target. MCX’s CurrentC has an expected launch date of early 2015.
Walmart did not provide comment.
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Yea cause that .014% is brutal… how will they ever make up the difference.
Well, I’ll be sure to avoid fail-mart in future.
Yes I agree with you. If the fees are really high how come they still let people use their credit card to pay. No more Walmart for my family.
And the follow up question is this: If the fee’s are so high that they’re eating into their bottom line then doesn’t it say something about the unsustainable nature of their business model?
C’mon guys be honest. If you are Walmart shoppers you will continue to shop there. We go there for one reason – the lowest prices around.
I avoid Walmart at all costs. The people that shop at the local store are complete dirt bags. There is more product sitting on the floors and in the customer service return carts than there is on the shelves. Walmart has chosen to attract a certain type of buyer and employee… they can have them.
The only time I shopped at Walmart was when I was in the military stationed in other states outside of CA because it was the only option in the local area. Nothing but ghetto people and rednecks, and that seems to be the case at all walmarts. Yeah, they may have some of the lowest prices around, but I avoid them like the plague. I prefer to go elsewhere and pay a lil more and have a pleasant shopping experience without the mess or annoyingly long lines.
Actually isn’t that hard to avoid them… amazon fills most of those gaps, then there’s best buy for electronics, toys r us and books-a-million for toys, food kroger and publix, automotive just any auto store, plants and home stuff home depot… everything else target where you get better stuff anyway.
It’s pretty easy…
We don’t shop at WalMart – but this is certainly another reason to add to the already existing multiple reasons that I won’t set foot in a WalMart and why I cancelled my Sams membership in favor of Costco and BJ’s Warehouse clubs.
The Waltons can go pound sand where the sun doesn’t shine for all I care!
If only the rest of America would see it this way and stop giving the Waltons all of their money. Such a terribly corrupt family and a terrible company. I hate that they are allowed to continue to operate the way they do, it’s quite disgusting actually.
So I do my best to stay out of Walmart but when I have to go into Walmart I will be sure to always use a CC so they still have to eat the fees regardless, if they accept Apple Pay or not…
I’m gonna start doing the same.
If this is true, and I suspect it is, this shows either one of two things… The extreme greed of the banks and CC issuers demanding excessive fees, or the extreme cheapness and stupidity of Wal-Mart (and rest of the MCX partners) brass refusing what I suspect will become the defacto standard of transactions in the not-to-distant future, consisting of Pay and Google Wallet.
In any event, Wal-Mart just lost me as a customer for life. I’m sure there are MANY others there that will follow suit, and the ones that continue shopping there will be the lower-income earners that won’t spend much at their stores.
Agreed.
I think it is Walmart. If you think about how the company operates and interacts with its venders and suppliers. which is kind like that big slow bully that uses it muscle to control whole sale costs. the self proclaimed low price leader is greedy!
People accuse Apple of being the bully in their business relationships – but WalMart wrote the book on bullying their “business partners” when it comes to getting their nose in their business partners business!
There was a CNBC special a year or two ago about the whole WalMart distribution chain – and they got to look behind the scenes of how you have to “court” WalMart in order for them to distribute and sell your products. And it’s not just about quality – it’s quite often about how to make the product cheaper (not necessarily better) so that the vendor will sell it to Walmart for less money. They also dictate to the vendor just how much profit the vendor is allowed to make in order to partner with WalMart.
Low prices – probably yes, but low quality has to factor in there as well.
As I said in an earlier post in this thread – this is just another reason that I do not shop at WalMart / Sams.
Agreed, Edison. This is a very good case of Wal-Mart corporate greed and/or stupidity.
This doesn’t even make sense when one looks at the fact that Wal-Mart is still taking the same credit cards as plastic that one can use with ApplePay and that ApplePay supports the use of debit cards, which to my understanding do not carry the high rates.
I don’t know this for a fact, but my guess is that this whole MCX and CurrentC cluster is Wal-Mart’s doing and that is the primary reason that they are pushing it so hard, and they don’t care about public opinion because in many areas Wal-Mart is a defacto monopoly.
The other MCX retailers are the ones that will really suffer. I predict that within three to five years from now Wal-Mart will be the only company to still be pushing CurrentC. I also predict that just like many of their other ventures in the tech realm the vast majority will ignore it.
After all, Wal-Mart doesn’t keep customers because of their loyalty to Wal-Mart. They keep them because they have destroyed the local alternatives or they are catering to a clientele where low price means everything. These people aren’t usually the ones that care about things like CurrentC or ApplePay.
Greed? [did you just use the word greed in a sentence where Apple is one of the subjects]? Have you forgotten all the billions Apple has stashed away while continuing to demand top prices for its products and not to mention tax avoidance.
I’m sorry, but I did mention Google Wallet as well, or did you just see the world Apple and it put you into attack mode?
Grow up! Wal-Mart defrauds their employees, doesn’t pay them fair wages, strong-arms suppliers into below-cost deals, and now wants to dictate payment options to consumers under the guise of saving on credit card fees?
Please! Take your blinders off! BTW, Wal-Mart is also an expert in tax avoidance, this is not unique to Apple. Every corporation in the WORLD with a competent accounting team does this!
I’m not sold on the ‘greed’ label yet. I would like to know first how much Visa, MC, and Amex pay out each year to cover fraud. So Target, another MCX participant, was a part of the largest credit/ID theft in retail history. Customers did not pay for all of the merchandise looted through id theft; Target, insurers, and the rest in the credit chain had to cough up the cash (which eventually trickles down to the consumers anyway, but they take the hit first).
And a secondary point about the ‘greed’ factor, we all have the option to pay cash. Card issuers provide an open line of credit. Basically, their percentage take is a direct reflection of how bad consumers want that line of credit. I am more apt to label consumers more greedy than the businesses serving them.
Kinda like how they will never pay their employees reasonable wages. It’s just too expensive.
“Kinda like how they will never pay their employees reasonable wages. It’s just too expensive.”
Considering the phone you have in your pocket right now was built by people who barely scrape a living because of the pressures brought to bear on their suppliers by Apple AND others, don’t you think your comment is a little bit ironic?
@Aunty Troll, I am baffled by your comment. It seems to be an incredibly Western centric view, and even then a very local Western centric view.
Several sources have reported that the Apple factories have far more applicants then positions because of its pay and benefits. When one looks at the actual dollar figures and compares those to wages and cost of living in the West it seems like they are paying them something that a person couldn’t live on, but that completely ignores cost of living.
Consider this. I have a cousin who lives in Canada and a German friend. They both consider US companies to be slave drivers and enforcing practices that are inhumane and illegal in their countries. Mostly having to do with vacation time and hours of work. Yet, many Americans clamor for these jobs because to them they are good jobs.
Could working conditions in China be better? Sure. Will they get better? Sure. Ironically, as the conditions get better China will lose business. A prior company that I worked with had several manufacturing plants in China. They were already looking to move into other regions of the world because the Chinese standard of living was improving and they knew that would lead to increased cost.
China won’t become destitute anymore than the US or Europe has, but they won’t be the go to manufacturing center of the work either. It happened in Europe, it happened in the US, it happened in Japan, it happened in Korea, and it will happen in China as well.
Actually your comment is ironic as because of your racist bias, you cannot even consider the POV of any one else… In China the factory workers come to the city dirt poor and they want to do better, they work at factories that you wouldn’t work in, but for them it is leagues above where they were, they can save cash, send some home to help the rest of the family. As you likely don’t send remittances to family to help them eat and stay warm, you obviously have no clue how other people have to cope in life. Sure there are probs, in N American business too, but for the majority of workers at Foxconn and others they make a better living and can help their families.
To deride that is just plain ignorant.
I agree with @mknopp. When I moved back to America from Germany I was dumbfounded in how employees are treated here, especially when it comes to benefits. Vacation is considered part of of being a healthy person in Germany and no matter where you work, whether it be McDonalds or The Deutsche Bank you get 6 weeks of paid vacation the day you start. Also health care, but lets not open that can of worms in this shit hole country where most big corps run the greed wheel as hard as they can to make sure their bottom line stays there. My fiancé just started a new job at a mortgage company, she gets 5 days paid vacation her first year and this isn’t a secretary position or anything low level, she has a masters degree and is in a decent position. This Western greed (can’t even call it that, let’s call it: American Greed) is absolutely disgusting and is imo the defining thing that makes this country look so pathetic to the rest of the world. The only countries that still see this one as the land of opportunity that made America so strong 70+ years ago are the ones that aren’t connected online, and that will soon change when Elon Musk connects the world in a few months.
“Vacation is considered part of of being a healthy person in Germany and no matter where you work, whether it be McDonalds or The Deutsche Bank you get 6 weeks of paid vacation the day you start. Also health care…”
Europe is socialist. Do you want that in the US? I don’t.
And yet they still accept credit cards, including Amex, which has higher fees than Visa and MarsterCard.
Shows their arrogance and ignorance. They will lose sales if they stop taking credit cards, which have the same fees and Pay. Personally, I avoid Walmart as much as possible. Will continue to not shop there.
Walmart probably pays one of the lowest fees in the industry. I wouldn’t be surprised to hear they only pay 1%.
As someone in merchant services I can confirm that they pay the LOWEST fees along with McDonald’s
iphone owners rarely shop at that shthole.
Wow – please can you provide a link to the report which proves that? I suspect you can’t – because one doesn’t exist. And it doesn’t exist because you don’t know what your talking about.
iphone owners are not only rich .. they are everyone coz of subsidy program in USA. So buying $200 phone doesn’t distinguish you in celebrity position. Dickhead ..
Yea and now that you can lease an iPhone with no money down, even more “lower class” people can have one
Why would I or any consumer want to add a Direct access to their bank account with this new CurrentC program. I mean if this shit got hacked, hello 150 million people bank account numbers, names, phones numbers and so on all exposed. When a credit card number gets stolen by the current CC model which walmart doesnt like, you get yours deactivated and a new Credit card is shipped out. when exposing a bank account, your talking new bank account # and new Credit card. i think this will just add more cost to banks that will eventually put it back on this CurrentC program.
That argument doesn’t make any sense. If that’s their stance they should refuse to accept Visa / Mastercard plastic as well.
The holdouts don’t want to admit their true objection to Apple Pay: It doesn’t let them track customers like CurrentC would. So they blame Visa and Mastercard for their rejection of Apple Pay. Who won’t see through that? It’s like saying, “You can use Visa / Mastercard, but only if your card is carried in an approved container.” And they don’t approve of containers that protect your privacy.
CurrentC is embarrassing. To get people onboard with the terms that have been described thus far retailers will have to offer incentives in excess of what they’re paying Visa and Mastercard.
Credit card swipe fees are typically around 3-4%. Regardless, how many people are still paying with cash or check? It can’t be a high enough percentage to flat out refuse to participate in the most secure form of payment ever created.
CurrentC would’ve been a great idea 3 or 4 years ago, but that ship has sailed. Starbucks is the only retailer that has successfully deployed such a system, and that being said, mobile app transactions account for only 15% of their revenue in the US. CurrentC is too complex and time consuming to be a convenience for the average smartphone user, and the icing on this awful cake is linking your bank account info to the app just to save the retailers from paying the credit card fees.
The only benefit to CurrentC is loyalty cards, and once Apple figures out how to incorporate loyalty programs into Apple Pay, CurrentC will be dead in the water.
I don’t know about how it’s done where you shop but I give my loyalty card to the cashier before the transaction begins.
I don’t know where you got the 3-4% figure from because here are the processing fees for Westpac NZ that merchants have to pay:
http://www.westpac.co.nz/business/payment-solutions/pricing-and-fees/
American Express on the other hand is something close to 3.4% based on my experience when making a one off payment to Spark NZ when paying my phone bill.
Sorry, the video clip doesn’t support this article’s claim, no matter how many times its repeated. What the clip does support is: Walmart is upset that CurrentC won’t receive the lowest rate on credit card transactions, because it doesn’t utilize the full “EMV” protocol that Visa and MasterCard devised for secure mobile transactions. Instead, CurrentC uses QR codes, which breaks from the EMV specification. The clip concludes, however, with an acknowledgement that the field of mobile payments is young and still subject to change.
It’s also clear from the video that CurrentC doesn’t use credit cards, because it doesn’t receive the same low transaction fee as card-present transactions, because CurrentC doesn’t follow the EMV protocol prescribed by Visa, MC and AmEx.
The video wasn’t proof of the article’s claim. Click the links in the article for the source of the claim.
The video was just to show the tension between Walmart and the credit card companies in that particular meeting: “Look no further than the video below in […] to see the tension between the retailer and credit card networks.”
Everything I have read about CurrentC indicates to me it is nothing more than a store card on steroids! The intent is not convenience for the customer, it is to get as much info on you as they possibly can to “share” (read sell to) there partners.
Let me get this straight. They won’t accept Apple Pay because of the high credit card fees, yet they still accept plastic credit cards? Da fuq?? o_O
I have clock radio, walmart cannot afford. GREAT SUCCESS
If CurrentC members don’t allow ApplePay, what makes them think that Apple will allow a CurrentC application to run on iPhones?
Most valuable company in the world with the most valuable brand in the world vs. the biggest employer (publicly traded) and retailer in the world. Grab the popcorn. Let’s sit back and see how long until Walmart caves in…
Maybe with the money they will save not using Apple Pay Wal-Fart can now afford to pay their employees a little bit more, hahahaha right.. No more shopping their for me and my family either!
I don’t know how you can type that comment with a straight face when you probably have in your hands a phone made by people who are paid a pittance.
I don’t know how you can type anything seriously on here when you openly admit that you are a troll in your name..
Herb, is that you?
And your phone is? What free range or some such crap. Yea, they are all made pretty much in the same place. We all know the plight of Chinese workers. I would love to see them make more. What I DO NOT like is having to subsidize Wal-Marts employees with my tax dollars. I refuse to give them any of my business, this is just icing on the cake for me.
Great !!!
Thanks to walmart now i have another reason not to go to walmart anymore !!!
its not about not using apple pay , it is about the arrogance and ignorance attitude towards customer.
customer have the freedom to choose the payment method !!!
I guess they’ll have to weigh cost of credit card fees against loss of customers who wish to use Apple Pay or Google Wallet. Oh well, the Walton family didn’t get filthy-rich by giving away money. They earned it the old-fashioned way by stiffing employees. I’m not sure how long they’ll be able to avoid Apple Pay but I’m sure they’ll give it their best fight if they’re really trying to cut costs. I always thought retailers were supposed to give in to the customer on these sort of matters. Isn’t there some saying that the customer is the most important product.
The only retailer I use on the MCX list is CVS where I get my medicine from. I only pay a dollar co-payment for those on my health insurance plan. It’s just down the block from my clinic so it’s convenient to get medicine when my doctor “E-scripts” it and the pharmacy is very quick and efficient. I should probably just tell my doctor to send it to my local Walgreens where I usually shop for odds and ends. I’ll see how things go over the next few months.
I don’t shop at Walmart now as it is. I haven’t been in one for over a year now. So this news just gives me another reason to stay away.
I guess I am a little confused, why does Walmart offer a “Walmart Branded MasterCard Credit Card”?
What type deal does Walmart have with Discover? They offer both store and branded Walmart and Sam’s Club cards.
The key is going to break the guys like CVS off. Walmart are a bunch of arrogant _______ (insert your term here), and will hold out to the bitter end. If guys like CVS and RiteAid dropout, CurrentC is guaranteed to fail. I have already stopped shopping at CVS and switched to Walgreens. Key is to let CVS know that they are losing out high margin sales.
If you hurt me as a consumer/customer, I will not do business with you.
I don’t believe Sam WAlton would have done this if he was still around
Its quite simple, we don’t need to boycott Walmart and other MCX Corporations for not accepting NFC payments. We just need to NEVER pay with cash.
Let me translate it: We think that we pay too much out for your convenience from the amount of money that you leave in the store, so we are going to cut your convenience into half by implementing a payment feature that is not compatible with anything, you’re not going to like it, but cheaper, so we can gain more on you :D
Well, the market does not work in that way, so I’m curious who is going to win this, but my bet is not that it will be the Walmart :D
I hope they choke on it!
The only people who shop at walmart are poor people. You think they can afford iPhones? Lmfao
Sam Walton would not agree with this at all.
At Walmart, THE CUSTOMER ALWAYS COMES FIRST!
If the customers want Apple Pay, give it to them.
No questions asked.
video doesn’t work.
I don’t think there is a technical reason Apple Pay cannot support MCX cards just as easily as it supports Visa/MC, is there?
So is the Visa/Mastercard fee higher if you use an NFC terminal versus if you just swipe the same card at the terminal?
Up here in Canada, certain retailers have told me that yes, using the NFC terminals increases their costs, hence why they’ve disabled them. Not sure if there’s any substance to that claim, but many retailers have said the same thing, so there must be some additional fees tacked on to NFC, at least up here…
From all the articles and posts made, the bottom line is the MCX retailers are wanting to push customers to cash, direct bank access or use of a store credit account.
Cash – great, awkward if you are making large item purchases,
Direct bank access – no thank you, too risky without fraud protection in place if your information were to be compromised.
Store Credit Account – Only IF the rate were lower than my current credit card.
The MCX consortium sole purpose is to maximize the amount of money that its members make from their customers and providing a vehicle to increase that. Will we, the consumers, see any significant discount on goods and services for our participation in CurrentC, I doubt it.
Oh well. It’s not like I go there all the time. This is different from CVS and Rite Aid since those two retailers had NFC mobile payment systems in place, and then disabled them. I accept credit cards in my own business, and I’m frequently very annoyed with the fees. I can either raise my prices to cover the fees, or search for a better credit card processing service.
I’m stunned that Visa didn’t put Mike on the spot with one of two possible questions:
1. How long does it take for an ACH transaction (the system MCX uses) to show up on a bank account?
2. Does MCX offer any sort of fraud protection or purchase guarantee?
The answers, of course, are 2-5 business days depending on the financial institution and zero fraud protection or guarantee. You send your money and it’s gone. No disputes.
This is simply about Walmart and other retailers looking to pad their margins.
“This is simply about Walmart and other retailers looking to pad their margins”
No! I can’t be that the Waltons want more! Maybe Alice will build another art museum.
Hey, ban credit cards then.
walmart in canada offers tap to pay
since applepay works with all nfc tap to pay does this mean there going to disable that?
also wouldn’t the fees be the same from a nfc credit card or google wallet etc.
so i don’t understand there B.S
Where about in Canada are you? I’m on the west coast, and over here, none of the Wal-Mart’s I’ve visited in the past had NFC terminals installed, even some of the newer stores built just recently…
More vapor.
These retailers are slobbering over the prospect of a new viral payment method that does away with credit card fees and reclaims 2-3% of their revenue.
Its not gonna happen. The reason why ApplePay is already a huge success and will, over the course of probably 3-5 years, become the number 1 retail payment method in the U.S., is because it didn’t try to side step the banks and credit card issuers. This basically guarantees they have a chance at winning over everyone already using that plastic.
What about Visa Debit cards?
Spanner in the works?
Walmart is really fighting high credit card fees, they should stop accepting payments from these cards that charge these enormous fees they speak of. Wait, what? They would loose too much in sales?
Hmmm.
I avoid Walmart like the plague as it is. Yes the prices are ok but customer service has been notoriously bad anytime I have gone. I’ve always said if WalMart had the level of customer service as Apple Stores they would indeed take over the world.
It’s like the old saying, “God made beer to prevent the Irish from ruling the world.”
Unfortunately for Walmart, their customers are their employees.
And they wonder why their sales are down. When you don’t pay your employees enough to by your cheap crap you deserve it.
Pretty interesting play on Walmart’s part. I would love to know the behind-the-scenes discussions. You don’t get to be one of the largest retailers in the world by making dumb decisions, so there’s more at play here than a simple .014%. Walmart accounts for a large share of iPhone sales. There may be some dealing going on here and they are simply exercising some leverage. Walmart is not stupid and they fully understand the power of making the sale process easier. They already know if they can eliminate a few steps in the payment process and funnel a few more dirt bags through their lines per hour, it’s billions in the bank. There has to be more going on.
As if I needed yet ONE more reason not to shop there. I haven’t shopped at a Wal-Mart in many years for a whole slew of reasons. I’ll just add this one to the list.
Fine. I’ve always hated shopping at Wal-Mart. I’m sure Target will be happy to take my money.
Unfortunately Target is also a member of MCX, and they were recently involved in one of (if not THE largest) credit card identity breaches in US history, so I wouldn’t be so quick to shop there either…
Exactly! And CurrentC wants SSN and DL #. Not in this lifetime if I have say in it.
Sounds more like a personal grudge from Walmart to me.
MCX are paying a fee to use a service. Mastercard and Visa just made the service better by adopting Apple Pay.
Jim McCarthy is correct in that they don’t know how Apple Pay will affect sales, tokens, etc.
I think as a service, it may now be worth the fees. The promise of no simple, no hassle transactions has become a reality.
There is still the question of customer data that is very valuable to the MCX members. Maybe a form of voluntary disclosure in return for discounts can be used. An app that lets you give personal information.
I would not use Walmart anyway. And really, CurrentC. Yea, right! I try my best not to be tracked online or in stores. I don’t use store cards for that reason, why in the world would I give any of these CurrentC dips..ts my personal info.
Walmart is a miserable, dirty hell hole – the dregs of low end retail. This shouldn’t be a going concern.
So when are they going to stop accepting plastic?
Says a business that has killed many smaller mom and pop shops.
This is a bad move to Walmart as they only care about themselves rather than their customers and this is why I don’t shop at Walmart.
God Bless competition!!!
So NO ONE else saw The Hoff at 0:34?!?!
It isn’t all directly about the fees. It is about customer flow at the terminal. Ever notice that Walmart and most other retailers try to push you into using your debit card instead of your credit card? The first thing the terminal tries to do is get you to enter your PIN and if you enter it, It automatically selects debit, even if you choose credit on the self checkout register or tell the cashier you want credit. It seems pretty deceptive to me. I always go out of my way to select credit, even though my bank doesn’t charge me for debit card purchases at places that push me to the debit screen. By the way, some banks charge for debit card purchases or have a maximum you can make monthly so you should always choose credit anyway.
There would be no way to funnel customers to their debit cards if they chose ApplePay at the register. Walmart does enough business that I’m sure that when they test pushing customers to debit compared to letting them easily get to credit, they discover they lose millions.
I have an iPhone 6+ and I am rooting for Apple Pay but I’m not getting a good feeling about it succeeding. They really need to find a way to get all major retailers on board or it is going to flop. I am sure I am not the only person that wants to use a single payment source for all transactions. If I have to decide if I can use my phone or my card, the appeal of it is diminished. Yeah, it is a first world problem but I would prefer to just carry my phone and my driver’s license if I am going to use Apple pay, especially since my phone is gigantic.
Walmart you suck!!!!!!!! If I was calling the shots, you would accept any and everything to generate sales. Are you in the retail business to make sales or are you just so f***up about the small amount you have to pay credit card fees. Get your damn act together and accept any and everything to get more customers and a return to being the largest retailer. You don’t ever say the word “NEVER” it will come back to haunt you.