Category: Mobile Payments

The newly released mobile wallet from Apple is already being shut down by the competition.

According to The New York Times, Rite Aide and CVS Health, two prominent retailers in America, stopped Apple Pay from working in their stores across the country over this past weekend, and although the decision may not make sense in terms of ensuring customer satisfaction, as a business decision it makes more sense considering these retailers and others are planning to implement a mobile payments system that will compete with Apple’s.

A group of retailers are currently working on a mobile payments system called CurrentC

Although CVS did not comment on the decision, A Rite Aid spokesperson, Ashley Flower, said that Rite Aid “does not currently accept Apple Pay,” and that the company was “still in the process of evaluating [its] mobile payment options.”

Furthermore, while Apple also declined to comment on the recent actions taken by the retailers, the chief emerging payments officer at MasterCard, Ed McLaughlin, said that MasterCard believes customers should be able to pay using any method they want and that Rite Aid and CVS made the wrong choice. The well-known credit card company has teamed with Apple on the new system.

However, while the move made by many retailers across the US to disable Apple’s contactless payments has come as a surprise to many, analysts say that disabling Apple Pay could have been a decision that was made to benefit a rival m-payments system known as CurrentC, which is currently being developed by Merchant Customer Exchange (MCX), a consortium of merchants, which include CVS, Rite Aid, Gap Inc., Walmart, and Best Buy, among others.

Many believe that Apple Pay will give CurrentC a run for its money.

CurrentC, which is set to be released in 2015, will be connected to the debit account of consumer’s who uses it via an app that users download. This means the payments system would bypass credit card companies, which could mean that merchants might potentially save money on how much they pay in fees for every transaction. To make a purchase, the merchant has to scan a QR code, which initiates the transaction.

Apple Pay, on the other hand, only works with the company’s newly released iPhone 6 devices and it basically supplants tradition credit cards, giving consumers the power to pay for their merchandise with a wave of their smartphone using NFC (near field communication) technology. Presently, over 220,000 retailers are equipped with this technology.

The New York Times reported that those who are opposed to CurrentC say that the system will be harder to use than Apple Pay, as it will require customers to unlock phones or open an app, which is more complex than simply paying with a credit card or cash. McLaughlin believes Apple will win in the end because its payment system “is the most convenient, most secure, and what’s best for consumers.”

The results of a recent study show that people expect wallet apps to become commonplace by 2017 to 2019.

Although there have been doubts with regards to the mainstream use of mobile payments in the United States due to the “slow” rate of adoption by merchants and consumers, a recent study shows that shoppers do feel that the regular use of these digital transactions is not long off. A survey was conducted by Mobile Commerce Press which revealed that the majority of people expect that mobile wallets will be as mainstream as plastic credit cards at some time between 2017 and 2019.

Changes in methods of payment away from cash have a long tradition of slow uptake.

Most people today are very comfortable and, overall, are quite satisfied by the experience that they receive through the use of credit cards at the checkout counter. But this was not always the way. Plastic credit cards were actually first invented in the 1920s. They didn’t become popular until the 1950s. When considering that three decade gap, the expectation that mobile payments will take between 5 and 10 years to become is not necessarily as lengthy as it might seem.

As more mobile wallets are unveiled by large players, such as Google, telecom companies, and Apple, consumers are becoming more aware of what they have to offer, and the types of benefits that they could enjoy.

According to the editor of Mobile Commerce Press, Loreen Worden, “Mobile payments would be one more step away from the reality of how much we spend,” and went on to say that “in fact mobile payments would be a boon for credit cards.”

Mobile payments will be convenient for consumers and could be tremendously beneficial to credit card companies.

Worden stated that she feels that the credit card industry should be pushing mobile wallets more than they actually are due to the spectrum of advantages it has to offer them. The lack of plastic card manufacturing and distribution, on its own, has great cost saving potential, however, there is a psychological element that Worden feels should not be overlooked.

She pointed out that as is the case with other cashless forms of spending, there is a psychological detachment between spending and the understanding of how much money is actually being spent. When cash is used, the consumer can watch the amount of money reducing in his or her wallet. However, with credit cards and mobile payments, a mental record needs to be kept. The amount of total available funds shrinks, but not right before the spender’s eyes. This is exactly the type of effect that leads to the largest profits for credit card companies.

Key findings from the Mobile Commerce Press survey:

• 30.3 percent of participants feel that mobile payments will be mainstream by 2017 to 2019.
• 20.5 percent think that they will be commonplace by 2015.
• 18.9 percent feel that 2016 will be the year of mobile wallets.
• 11.5 percent said that by 2017, they would be commonplace in the US but that the rest of the world will be mainstream by 2015.
• 11.5 percent said that 2020 will be the year in which the whole world considers these transactions to be mainstream.
• 5.7 percent felt that smartphones would never become a typical form of payment, and that credit cards will always rule.

Mobile Commerce Press is a Los Angeles, California based news magazine that was established online in 2012. Its writing team regularly posts articles that share the very latest in cutting edge mobile technology, m-commerce, mobile payments and wallets, marketing, and other important trends relating to smartphones, tablets, and wearable technology devices.