Apple’s Apple Pay is a successful new product for the company, with the payment solution having needed just a week to become more popular than all other mobile payment platforms combined, at least in the U.S. That said, not all retailers are eager to let customers pay with an iPhone 6 or iPhone 6 Plus in their stores, with the MCX group — which includes Walmart, Best Buy, Sears, Target, Gap, CVS, Rite Aid, and many others — not supporting Apple Pay at this time.
The New York Times has apparently learned the one thing that’s keeping many of these stores from supporting Apple Pay right now, though MCX is somewhat disputing it.
MCX’s upcoming smartphone-based payment solution is called CurrentC, and it has various features that differentiate it from Apple Pay. The most important ones affect the actual payment process (a credit card is not required for it to work, and it doesn’t need NFC technology) and data collection (CurrentC can collect data to let MCX members better track and target their customers with other programs and products).
But there’s one other reason preventing MCX retailers from embracing Apple Pay, and it has nothing to do with CurrentC’s features. All retailers have inked a contract to support CurrentC when joining MCX, and that document includes “steep fines” for supporting competing mobile payment products such as Apple’s Apple Pay, according to the Times.
It’s not clear what these steep fines may amount to, but this could explain why CVS and Rite Aid abruptly removed Apple Pay support from their stores a few days ago.
“When these contracts were signed several years ago, no one knew about Apple Pay, or what mobile wallets were going to look like,” Market Platform Dynamics CEO Karen Webster said. “It just didn’t have the same sort of consumer froth around it.”
Interestingly though, in a blog post that aimed to clear the air around CurrentC, the MCX group said that it does plan to support credit cards in the future, and that it won’t share transaction data if the customer opts out of it. MCX also said that CurrentC is the only mobile payment option for MCX members, adding that any member can leave the group without having to pay a fine. However, it’s not clear if a retailer supporting CurrentC and Apple Pay would have to still pay fines.
“MCX merchants make their own decisions about what solutions they want to bring to their customers; the choice is theirs,” the MCX group wrote. “When merchants choose to work with MCX, they choose to do so exclusively and we’re proud of the long list of merchants who have partnered with us. Importantly, if a merchant decides to stop working with MCX, there are no fines.”
Ironically, the MCX group also addressed security in the blog post, but on the same day a report emerged revealing that CurrentC has already been hacked.