Retailers vs. Apple Pay: The Stupidest Industry War

Last week, Apple finally activated Apple Pay, its much touted mobile payment system using the NFC-equipped iPhone 6 and 6 Plus. Apple is admittedly late to the game on this one: NFC terminals have been around for years, and other smartphones have been using mobile payment systems (notably Google Wallet) for quite some time. However, there is no denying that once Apple enters an arena, the world takes notice. With Apple Pay, the concept of using your phone to make super-quick purchases seems more plausible as an everyday occurrence. I’ve used Apple Pay at least six times (according to my Last Transactions screen) and each time it has been so seamless and easy that it’s become annoying to pull out my wallet at other places.

You would think that retailers would be chomping at the bit to support Apple Pay and other NFC payment systems. I mean, why would a company refuse money, especially if it can alleviate long lines and ease checkout headaches?

Someone should ask CVS and Rite Aid, as they have officially shut down Apple Pay.

The two convenience stores aren’t the first retailers to openly reject Apple Pay. Both Wal-Mart and Best Buy have come out in opposition to the service, in favor of their own collective mobile payment system called CurrentC. CVS and Rite-Aid are also apart of this consortium, the Merchant Customer Exchange, or MCX, which provides some context for their decision. What makes the choice to reject Apple Pay ridiculous is how they have gone about doing it, by shutting down NFC terminals already installed at their checkout counters altogether, effectively ending support for Google Wallet and other contactless payment systems. Now, whether you use your iPhone, your Galaxy, or your chip-installed credit card to pay, you can’t.

At least Best Buy and Wal-Mart have valid excuses for not supporting Apple Pay: they don’t have the technology to support it. But for two retailers to completely shut down NFC just because Apple Pay is a thing is an affront against common sense. Even if they didn’t come out as official Apple Pay partners, like competitor Walgreens, they still had the technology to support it. Now, they are making mobile payments completely impossible for everyone who can and would use it. The caveat to this store wide shut down? According to an internal memo, the stores’ own mobile wallet system will be available next year. As in not now, when someone using Apple Pay or Google Wallet could easily pop over to Walgreens for whatever they need.

It’s clear now that any retailer who is opposing Apple Pay is probably either a part of MCX or developing their own mobile payment system. It’s another case of Apple walking into an industry ready to upend it with a solution to make things better, and the industry trying to push back. Apple wasn’t the first to develop the mobile wallet, sure, but it has the deep brand loyalty and support to make it actually succeed, where Google and PayPal have been met with tepid response. Even better, Apple is using NFC, the standard technology that is already installed at many, many retailers, instead of developing a proprietary system separate from other companies (the Lightning connector, for instance). It’s a win-win for consumers of all smartphone platforms, and could finally kickstart the so-far pipe dream that is the mobile wallet. That is what Apple has done better than anyone else since the invention of the iPod in 2001: completely revolutionize how we do things.

After the challenges that the music, book, and film industries have experienced fighting against Apple’s push towards the future, you would think the retail industry would’ve learned from those costly, embarrassing mistakes and embrace this latest change, if not completely try to ruin it. But no, retailers are so desperate to fight Apple that they will attempt to kill NFC, even it’s already supported. Why?

Because the mobile payment solution that Apple and Google are pushing protects consumers from having their information stored by retailers for purposes that are primarily for marketing. Retailers would much rather keep all of that data stored, so it can be stolen quite easily, as Target experienced with their absolute disaster this past year. Apparently, this information is precious, and is worth the risk of stifling innovation that would surely make the retail experience more satisfying for all involved.

CurrentC will probably flop, as other industry alternatives to services offered by Apple and Google have before. It will be an embarrassing flop that the will prove, once again, that innovation is in the hand of the technology companies that are currently dominating our social and economic lives, spearheaded by the world’s largest company, Apple. This is a stupid war that will only give shoppers headaches, and eventually they will get sick of those headaches. Most likely, they will skip a Rite-Aid or a CVS and head over to Walgreens, which was smart enough to see where this was all headed. Now that’s Apple is on board, NFC is here to stay, and if you aren’t on board, you will get left behind. It’s just going to be a long, annoying trip.

Leave a Reply