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Apple Pay Sparks Mobile Payments Skirmish


Paying for your purchases has become a multiple-choice activity in recent years, but one of the newest ways to pay wont' be available at a number of high-profile retailers.

Paying for your purchases has become a multiple-choice activity in recent years, but one of the newest ways to pay wont’ be available at a number of high-profile retailers.

Apple’s new Apple Pay platform launched this month on the company’s iPhone 6 and iPhone6+ devices. The system allows users to turn their smartphones into a wallet of sorts. Instead of swiping a card at the cash register, a user can used stored bank account information to wirelessly transmit the payment to the vendor.

A long list of banks and retailers, including Bank of America, Macy’s and McDonald’s, have rushed to embrace the payment system. However, a number of retail giants, including Walmart, CVS Health, and Rite Aid have opted out of the system.

The reason? Those retailers and others are members of the Merchant Customer Exchange (MCX) a consortium of retailers that has been working to develop its own rival mobile payment system, called CurrentC. That app which will work on Apple and Android phones next year.

Members of the consortium are contractually banned from using accepting rival mobile payment systems, according to a report in the The New York Times. So even though CurrentC isn’t yet ready for widespread launch, retailers who are consortium members have to choose between waiting for CurrentC or leaving the consortium and accepting Apple Pay.

MCX responded to the story by confirming the restriction, though the consortium said it won’t fine members if they choose to leave the consortium and adopt other payment systems.

“MCX merchants make their own decisions about what solutions they want to bring to their customers; the choice is theirs,” the company said in a blog post. “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.”

For its part, Apple told Business Insider that early feedback from Apple Pay users has been “overwhelmingly positive and enthusiastic.” Apple said its payment system is currently available at more than 220,000 retail locations.

Perhaps the bigger long-term question hanging over mobile payments will be the same question that plagues all electronic payment systems: Is it secure?

Apple and MCX seem to differ on that question, too. Apple Pay stores encrypted account information on a dedicated chip within the phone itself, rather than on Apple’s servers. MCX, meanwhile, will store data in a secure cloud-hosted data center, which it argues is safer than storing the data on the phone.

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