As we reported in our initial coverage of the CurrentC payment system, the New York Times has confirmed today that MCX partners working on the system are contractually required to accept CurrentC exclusively. Any retailers that decide to accept other payment services, such as Apple Pay, will be fined:
The problem is that under the terms of their MCX contractual agreement, they are not supposed to accept competing mobile payments products like Apple Pay, according to multiple retailers involved with MCX, who spoke on the condition of anonymity. If these retailers break their contracts, they will face steep fines for doing so, these people said.
As we pointed out last week, retailers that have signed on to help build and accept CurrentC started disabling their NFC terminals to block the usage of services like Apple Pay, Google Wallet, and Softcard. Apple’s Greg Joswiak responded to that decision earlier today, and Apple released a statement saying the company is working to get the technology into as many retailers as possible.
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There is a petition on WhiteHouse.gov to get President involved. Don’t know how much that will help but it’s worth a shot at expanding NFC use in retail stores that specifically block it for whatever reason.
The link is here: https://petitions.whitehouse.gov/petition/make-near-field-communication-nfc-payment-mandatory-payment-option-usa-protect-privacy-consumers/jx4fvq7k
Yeah… because between ISIS, ebola, immigration, the dour economy, and the upcoming election, the one thing that our country’s leaders ought to be focusing on is whether or not CVS accepts Apple Pay.
You’re absolutely correct. The president (and the entire government for that matter) should focus all of their efforts on ISIS, ebola, immigration, and the economy. There is no reason to tackle anything else. “Running the entire country” simply boils down to managing those four issues. There is no room to consider expending minute effort on anything else.
I would normally agree with you but its about the only thing that can get done currently….unless Democrats start agreeing to cut social seurity and medicare and obamacare entirely while cutting taxes for those making millions each year.
@rakinjannot The fact that you seriously wrote this reply—as if our federal government should really be involved in mandating that a private, commercial enterprise should accept the payment terms of another, private, commercial enterprise—is of major importance to the national security of this country, proves to me that you live in a strange bubble. I would suggest you step away from such inflatable worlds and live in a real one, my friend. Only a couple of weeks ago, Apple Pay didn’t even exist, but we’ve had credit cards since, oh, 50 years ago. Would you likewise argue that in the 1960s, President Johnson should’ve declared that all companies accept Diner’s Club instead of the “archaic” printed dollar?
Brian, I would argue that the market should decide not a cartel of retailers colluding to create a payment processing monopoly.
@Chris Sanders Then we are in complete agreement.
The economy doesn’t fully rebound until 2018- I don’t know why people still don’t complain about it. When it crashed they knew it would be 10 years but you can tell the public that else they’d freak out. So we invented a cute term, Great Recession (it is a depression), and have ourselves the right metrics to see improvements in the short term.
Accepting more forms of payments in more places will actually help the economy. Think for a second. Make it easier to pay for more people and they’ll buy more stuff.
@BrianBatch Ummm… what the heck are you talking about? I wasn’t pining for the US to take action. I wasn’t waving the flag of any cause. I was merely highlighting how poor of an argument you are making.
@rakinjannot—Do you even understand the slightest bit of what I replied to you? Or even what you yourself posted? (rolls eyes)
#firstworldproblems
It’s competitio and consumer privacy. They should be valued.
It’s competition and consumer privacy. They should be valued.
Then these retailers should just dump the non-existent CurrentC, and move on. They would also be better served by saying to their customers that they cannot accept CurrentC due to a contractual agreement. Who runs the PR divisions of these companies?!?
They paid between $250,000 and $1,000,000 to be part of MCX.
http://www.fierceretail.com/retailit/story/mcx-sees-ach-as-its-interchange-salvation-many-chains-not-so-sure
Which they make in about 15 seconds
Probably not that easy. Contracts are signed. Breaking the deal probably comes with contractual fines that are pretty steep.
Their accounting departments run them.
@finngodo—I agree in theory. However, having been in corporate procurement and contract management and negotiations, I can attest that a smart company always tries to work in an “opt-out” clause of some sort if certain milestones are not met. If the wizards at CVS/Rite-Aid/Wal-Mart/et al did such a thing, than CurrentC—under development for years now, with substantial money invested, and no physical product implemented—hasn’t come to fruition, these companies should pursue their opt-out clause instead of alienating customers, blocking disruptive technology, and redistributing potential profits to rivals. I think these folks are in collusion with other members of the consortium, including the CurrentC folks, and need to think again before jumping the gun and betting their bank on a system is doesn’t exist and is inherently flawed (security-wise). No one is strong-arming these corporations to accept Visa/MC for payment, yet they continue to do so because the practice allows more choice to consumers, even if they gripe about the payment terms. If Apple Pay really catches on, the consumers who really dig Apple Pay will march elsewhere, and these same corporations will have a reason to start believing in Apple Pay’s promise, despite their contractual obligations to a non-existent system in which they have (IMO, foolishly) invested.
Doesn’t explain why these retailers accepted Google Wallet up to this point.
Probably because someone turned a blind eye… but have been making the phone calls to all the members these days, scared that Apple would pose a serious threat to all the consortium (unlike Google’s solution, which had low adoption rates).
hmm… interesting that it wasn’t really a big deal until Apple got in the game. It makes me think that people inside the industry see Apple’s implementation as a threat where they didn’t from the others.
Or…. it could just be a matter of Apple Pay tipping the scales to the point where it was time to start locking things down.
Either way, as a consumer this sounds to me like when some establishments only accept certain credit cards. I will end up going to those locations where I can use my preferred payment method, as will everyone else, and the market should eventually sort it out.
It’s pretty clear that existing mobile payment solutions never had anywhere near the momentum that Apple Pay has. Apple Pay hitting the market will likely help raise the profile of Google Wallet etc. Until now however it was a niche market, and NFC itself isn’t as widely accepted in the US as it is in many other countries.
“As we pointed out last week, retailers that have signed on to help build and accept CurrentC started disabling their NFC terminals to block the usage of services like Apple Pay, Google Wallet, and Softcard.”
No, all NFC based systems are blocked, including google wallet.
OP is right, Google Wallet was accepted at these stores until last week.
Isn’t that what that quote essentially says…that the NFC terminals are disabled to block services like Apple Pay, GOOGLE WALLET, and Softcard…not sure where you’re going with this…
I was just pointing out that ALL NFC payment systems are blocked
They “accepted” Google Wallet because no one actually ever uses Google Wallet. Wasn’t a problem until Apple came along and created a system that people actually wanted to use. Had an Android phone with NFC a few years ago and it required opening an app, and entering a PIN that you only used once in a lifetime and therefore probably forgot.
This is a system (CurrentC) that has been led by Walmart…and now this system is denying customers a method of payment. Walmart leading something that takes advantage of customers.
Wow…what a shock. Second only to Fox News, Walmart is about the most evil and destructive corporation around.
Second only to fox news. What are you the last surviving member of occupy wall street. What a tool
I think he’s still camping out on the streets.
So you don’t think that a company that argued in court for their right to lie and distort their stories isn’t “evil and destructive?” Interesting. Says a lot about you.
Hes also the Apple device toting latte liberal northeasterner paying higher taxes because people in the south are deadbeats who dont care about taking responsibility for their lives.
I’m pretty confident that my financial success in the stock market would go very much against me being a member of Occupy Wall Street. I’m not one of the 1%, but I am in about the top 10%. So you can continue to have what’s left of your brain melted by Fox News and the rest of the right wing noise machine. In the meantime, I’ll continue to understand that capitalism is a great system but also needs to be protected from its own excesses.
Can’t apple just take down the CurrentC app from their store, making it impossible for the service to succeed without the proper distribution?
If that happened they’d just figure out a way to use a web app or something, I’m sure.
It just makes it that much harder. It might be worth it to have the banks say no. Everyone already hates them.
IF and it is a BIG IF they are going to do that, then it will probably be better to do it on launch week, with no notice, then as they ramp up there advertising efforts to draw people in it will simply not be available…
It will be very simple to kick them as well, for using functionality that is already available in the phone. Would be amusing to see that happen, no point in doing it now though, the app has no use… ;)
That would be an ethically challenged idea to say the least. What? CurrentC is doing the same thing? Never mind.
Ridiculous. ApplePay was designed to make the customer experience more smooth, safer and secure. CurrentC was designed to allow retailers to skip out on the 2-4% merchant fee, with the customer coming as an after thought.
Apple and Google should kick CurrentC out of the App/Play Store and see how it does then. They could kick them out tonight on the grounds that it is not an active service and serves no real purpose.
Okay, just so I’m clear: they’ll be turning away Apple Pay customers until CurrentC is made available “some time” in 2015. That could be 6+ months of passionate customers that will boycott their stores for not accepting the future of mobile payments. The fine might be “hefty” but may not compare to the backlash from customers who refuse to do business with these businesses until they change their mind. And again, this effects Google Wallet users too.
How draconian of MCX to force these retailers from accepting other forms of payments.
Now these retailers will be forced to turn away business for the sake of a platform that will likely get more push-back than acceptance.
Eh, I believe most people will just use the payment form they’ve been using their entire lives before Apple Pay came along.
Beyond MCX locking companies into using their non-existent tech, they’re method is nearly as bad as writing a check. It involves multiple QR generations and scans, and exposes your banking info to fraud. MCX is a joke.
It’s in private pilot now.
So basically, NFC payments were fine at these retailers until Apple put it in the iPhone. Or, in other words, they did not care before because nobody really used NFC payments until Apple pay? CurrentC is going to flop because the way they are doing is absolutely ridiculous.
It is a shame so many corporations went and acted without giving a shit what consumers would want. Of course that is precisely why pure capitalism will not ever work. Most corporations have zero ability to really understand what consumers want, and zero give a damn. They work to make it illegal to get anything better than what they want to give you. That is what our supposed “free market” gets us, less choice, more monopolistic bullcrap.
ISP work to make it illegal to for your community to make it’s own ISP, so then you’re just stuck with what they want to provide, which is often little to nothing. Automotive industry works to kill innovation and keep engines that exist in foreign markets out of the USA, engines which are as much as 100% more fuel efficient as any internal combustion engine in the USA. It is just BS, and it sounds a conspiracy theory like, but it isn’t! There are production model vehicles in the eurozone that make 80Mpg without hybrid, if you added hybrid they would be well over 100Mpg. Meanwhile the USA has these farcical competitions for efficiency tech, so that domestic manufactures can buy it from you and shelve it, and kill its production anywhere else!
Different cars do different stuff. Sure – you can get cars that get higher mileage but they’re very small and rather slow. The best technology seems to be turbo-diesel and there are rather decent cars with 1.0 liter engines.
But don’t delude yourself or anyone else that there’s a 100% bonus being kept secret in Europe. Or, if you do believe it, then please give us the info so we can all benefit.
I love how Apple’s entrance into this market has completely turned it into something relevant. I used Apple Pay for the first time earlier tonight, and it couldn’t have been any easier. Good luck to the competition, you’re gonna need it.
If CC gets by for a year with little ill effects from this. i think a big issue be whether they will allow CC connect directly to consumer back accounts without high amounts of insurance and safe guards. additionally just like they blocked apple and google the same can be done to CC like what apple did to Bose. either way CC won’t get off the ground very high before it falls back to reality and burst into flames!
Why have insurance or safeguards? They’re not liable. You get protection with credit card usage – with debit cards you get not very much. And direct access ACH stuff – who knows. Probably nothing.
Goodies for them. Nothing for you. What’s not to like ?
CurrentC is a joke. Who wants to connect apps directly with their bank accounts? What happens with fraud claims? Banks will not guarantee sh*t.
If I was with the credit company, I might think about hiking up the fees for these retailers!
Telling all my friends and family not to shop at Walmart or CVS. Screw CurrentC.
Well that’s their problem isn’t it !! Stupid stupid people tying their future to one solution !
Bring on the boycott !
Using CC means no mileage credit card since it comes strait from a bank account. No miles – No good!!!!
If miles are your worry then you haven’t been paying attention.
It was a joke, I do understand the security risk. I have been reading.
I wonder if this is even that legal. I am guessing it is. But I will actively do my best to choose those retailers not part of the MCX. We will see what happens
An exclusivity clause is perfectly legal. Whether it’s smart in any given situation is a different matter entirely.
I don’t get it, it’s the same credit card and same terminal, but for swiping the cc I tap it via phone. Are they going to ban all CCs payments in favor of CurrentC.
So what they are doing is not allowing the retail stores to use a competing service. So MCX is admitting that they are providing a service in direct competition with Apple. Doesn’t that violate the TOS of writing Apps for the App Store?
I guess Apple is waiting until just the right time to pull the plug. I can’t imagine Google not following suit. But that wouldn’t stop MCX from designing a very secure web app that does the same thing, adding a layer to the long customer process that is CurrentC.
CurrentC/MCX makes the point that no sensitive data is stored on your phone. Big deal.
This neatly glosses over the point that their database-in-the-cloud contains …
1. authentication/authorization credentials to debit your bank account
2. your SSN
3. your driver license information. They don’t say but I guess that includes your birthdate.
This is a dream-come-true for hackers. Everything you need for identity theft – all in one place !
One stop shop just like Walmart.
I don’t present own an iPhone that can even do Apple Pay, so this is all somewhat irrelevant to me — but given a choice between a merchant that blocks *all* NFC forms of payment such as Apple Pay or Softcard — which keeps my data highly secure — and a merchant who is security- and privacy-conscious (or, as I would call it, consumer-friendly), I know which businesses I will pick.
Maybe we can complain to our banks that CurrentC also digs up information on us against our will by looking up the contacts of friends family and co workers with information garnered through you SSN, DOB, where you live and shop, purchases youve made, and phone contacts. If we complain to the banks themselves maybe we can kill CurrentC before it ever has a chance to get off the ground.
I like the idea of hacking a dongle that can plug into the lightning port / micro USB port on one end and translate Apple Pay / Google Wallet on the other end to a magnetic strip. That would force the retailers to disable their swiping mechanisms for all credit cards.
Alas, that’s a pipe dream.
Hey everyone,
First time commenter, long time reader.
Let me preface my comment with this: I have an iPhone 6 and love Apple Pay. It’s easy-to-use and secure. As an end user, I think it’s crappy that CurrentC affiliated retailers are blocking out NFC in favor of their own system as a business strategy. But I also happen to see things from the CurrentC retailer point of view, because I run two businesses that accept credit cards as a form of payment. And again, I think CurrentC is garbage, but do hear me out.
A little background: As I said before, I am run two small businesses of which I am also a partner in. I run the day-to-day operations as well as do long-term planning (I’m in the hospitality industry). I see a breakdown of how our revenues that come in the door. I can say, with some certainty, that the days of physical (paper) cash transactions are numbered. Mind you, it’s not a small number, but you’re looking at a matter of a 10-20 years.
Why? Credit cards.
In our industry, credit cards are how a majority of our guests pay us. It’s that plain and simple. For the businesses I run, it’s in the neighborhood of 85% credit card to 15% cash. Why? One reason, among many, is that as more young people hit the age where they become consumers, credit cards are just what they are using. There are also more practical reasons, e.g. you don’t want to hit the town with a lot of money in your pocket. It’s potentially very dangerous. And honestly, if my guest wants to pay me with a credit card, I’m not going to be stupid and say no. I risk a pissed off customer and lost revenue.
For any business that accepts cash as a form of payment, it is also a huge (potential) liability. Employees can can steal it. You can get robbed on the way to make a deposit at the bank. Your business could get robbed. Your business could receive counterfeit notes. You get the idea.
With credit cards, you also run the risk of credit card fraud, and that is a legitimate concern, but not nearly as life threatening. This is why Apple Pay is exciting. Finally, a system that appears to be fraud proof! No fingerprint, no sale, no fraud. Simple as that.
Here’s the crappy part: Credit Card Processor Fees. I would estimate that we pay about $25-35,000 per year in those fees. It’s 1-5% of every transaction. It’s not a small amount, and that’s just my little business haha! I could hire another worker or invest in new equipment. Now scale that up to the level of the Walmart’s, CVS’s, Rite Aid’s, etc. That’s billions upon billions of dollars per year. These companies have investors to report back to. Investors who nitpick every line item, especially when that line item has an expense charge of Umpteen Billion dollars. I think CurrentC is one part of the business world drawing a line in the sand against another part.
Now, I don’t agree with how the CurrentC cartel is going about this. It’s anti-consumer, poorly thought out (gift cards, seriously?), and smells to me like something marginally illegal (but I’m not a lawyer, so I’m probably mistaken).
Having said all this: I’m firmly in the Apple Pay camp. Even knowing that I’ll still shell out tens of thousands of dollars per year in fees that are ridiculously high (The credit card system in the US hasn’t really changed in decades. Every time fees go up, it’s not to roll out some new technology or something that’ll help small businesses/retailers out, it’s a naked cash grab). I understand where CurrentC is coming from when I look at it in terms of straight dollars and cents. They’re tired of having to pay fees to Visa, etc.
This approach is not how to take a stand.
I have a feeling though that there’s a company in Cupertino that could probably figure out a solution that would make everyone, sans Visa and Co., very happy.
PS It’s 1am where I am. Apologies if my thoughts come off a bit scattershot.
True, good post. Competition is good, even if it comes in bad forms like CurrentC, since credit card institutions may consider lower or no fees at all (I don’t believe in the latter) to make it more attractive again.
Nik – Very nice explanation and logically thought out. :tu:
As you have explained, your business pay between 1 & 5% of the check to the Credit Card Companies – but I’m sure that you build that into the cost of “doing business.” You don’t discount the customers who pay cash that 1 to 5% do you? I didn’t think so – and that’s not a snarky comment – it’s just business, and I’m satisfied with that.
I use Credit Cards because:
(a) I carry rewards credit cards – which give me some of that fee you pay back to me, which is good, because if I paid in cash, I’d be making your bottom line healthier while decreasing my own. I am also a person who NEVER carries a balance, so the Credit Card companies hate me. I’m a drain on their bottom line, but that’s the cost of doing business.
(b) I do not like a butt wad full of cash, for the very reasons that you outlined. If I get mugged, I can make a series of phone calls and my liability for those credit cards is down to Zero. If I was carrying cash – I’m screwed.
(c) If I have a problem with a merchant / merchandise that I paid for with cash – well, again, my recourse is is very limited or it’s going to cost me time and money to go to court. A shoddy merchant might be willing to screw their customers for the short haul gain, knowing that most customers won’t hire a lawyer or invest in court dates over a couple of hundred dollars in a cash transaction. However, as a Credit Card user, the issuer of the card bears a lot of responsibility to assist me in making an attempt at recovery for a failed / bad transaction or purchase.
Yes – I do see your point about fees – but they are a cost of doing business and, if you are a successful businessperson, you see them as a “pass-through” to the customer. Your credit card fees go up, you simply adjust your prices to insure that the customer is absorbing them, not your bottom line.
BUT – this whole CurrentC plan that Walmart at al have put in place is a total win / win for them and a lose / lose for their customers. What protection do I, as a CurrentC customer get? None that I can see – except the ability to “tie my loyalty card” to my CurrentC account. I don’t see any of the fraud protection that exists on credit cards in this operation. It looks like it’s all geared to the businesses to reap the rewards.
I’m really glad that this scheme has broken out in Social Media – as well as the main stream media – as there are so many people who would sign up for it simply because” . . .WalMart / CVS / Target says it’s a good deal.” It is – but strictly for the businesses that propagate this sham.
Nik – Thank you for your post – it helped me to clarify my thoughts. It’s only 5:30 a.m. here – and I needed the clarity to make this post.
Thanks for your comments, here are some more thoughts and what I am actively doing.
This is a copy of emails and complaints I have been filing with CVS, Target, Best Buy, Lowes and others at their websites, Facebook and the complaint web sties.
These retailers, by complying with CurrentC rules have taken away my choice to protect my credit card number.
“This letter is to let you know that I have decided to stop shopping at your stores because you have elected to take away my choice of using Apple Pay as a payment method. To remove that as an option is tantamount to a slap in the face. You have every right to stop using Apple Pay, I don’t deny that. I am a victim of having my credit card number stolen through one of the recent hacking schemes and for you to take away the right for me to protect my privacy and protect my credit card information is not acceptable.
The interesting thing is that I don’t have an IPhone 6 yet, but it ordered. I will be using it protect my information and since your company prohibits me from doing that I cannot do business with you.”
And, by the way, I have stopped going to these retailers. If enough people stop patronizing these stores, they will get the hint.
There other points to consider here that I didn’t mention in my letter to these retailers.
In order for a consumer to use CurrentC, they must register and give them their checking account number. When that form of payment is used, then the retailer is paid by taking the money out of the users checking account. The retailer avoids the credit card fee. While that is obviously good for the retailer, it is not so good for the consumer. What happens when the system is hacked and your bank account information is in the hands of the thief? I shudder to think. I am very protective of my credit card info, even more so with my checking account number. I rarely give that to anyone, especially online (and another reason to never use a debit card online.) What happens if a mistake is made in the transaction, such as $800 out of your checking account instead of $8 or $80 and your house payment bounces? It would be a very cold day for me to allow a retailer to have access to my checking account. What about refunds, etc?
The other thing with CurrentC is that it gives the retailer the ability to track you. Yes, its true that the loyalty programs do that as well but that normally stays within the retailer. With CurrentC who knows where the tracking will go. Will Best Buy know what my “track” record is with Lowes, CVS and Target? Thanks, but no thanks.
Lol they will face fines? Well why the hell did they go with a horrible inconvenient service like CurrentC in the first place?? So dumb
Google wallet has been around for a while now. Why do they just disable it now when Apple jumps in?
To be totally honest… merchants that agreed to these terms are now facing the weight of their decisions. In the end, consumers make the call how & where they want to shop, not the fidelity cards.
It seems that signing that contract was the most stupid thing to do :) – Now that they are not ready, but they don’t accept Apple Pay, probably they will face massive customer loss. Not that if they are ready it won’t be the situation, by fulfilling that stupid contract’s obligation :)
The more bad press about this terrible system the better. I hope it fails miserably.
I will not use CurrentC as it would be a direct link to my bank account. The money is coming out of my checking, if there is an error what kind of turn around can one expect. Surely not on a Sunday or Holiday. No thank you CurrentC, no thank you.
Then why do they have NFC devices in the first place? From what I read, they use QR codes on screens and NFC is not even used. The NFC devices should have never even been in the stores if it is contractually competing technology/service.
This! How are you the first to mention this here?
This is so stupid, like taking VISA but not MasterCard because the business has investments in VISA. No one does this anymore. You can’t eliminate payment systems today, how can they think that every consumer will want to use CurrentC? No way. Let us use whatever method we want to pay, or if you force people to use only one secure way to pay, you WILL LOSE customers, not gain them.
Like another commenter, who does the PR?
I’m going to start complaining to businesses that I use that are in this stupid thing, tell management that I want to pay securely with Apple Pay, they need to let people pay how they want, if they want to pay w/Apple Pay, Google wallet, cash or totally NON-secure magnetic stripe cards, they should have all options available to them, but, most importantly, we need secure options to pay, not one secure payment system.
So how can we best spread the word to consumers and retailers that there are real risks and complexities wth currentc?
Don’t you have to take a picture of a QR code then show the cashier and he/she types in a code into the register? How does this make the checkout process any easier or quicker?