Apple Pay’s uphill battle continues as CVS Health Corp and Rite Aid Corp have both disabled the feature in their drugstores. They are part of a growing consortium of retailers, called the Merchant Customer Exchange, developing a mobile payments system called CurrentC that aims to circumvent credit card companies. Retailers can potentially realize a savings of 2%, making them more competitive.
The consortium now includes the likes of Exxon Mobil, Lowe’s, Target, GAP and dozens more. They’re take on an Apple Pay alliance with the 3 major credit cards companies, which Apple says facilitate over 80% of US credit card transactions.
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While many retailers have the near-field communications (NFC) technology to support Apple Pay, they may not have the appropriate software of infrastructure.
More significant is the prevalence of retailers intent on collecting consumer data for marketing purposes. As part of the consortium, a retailer can instantly apply a loyalty rewards discount to a purchase. Apple Pay confines all data to the mobile device. While customers won’t not have to supply a credit card, they may have to produce a separate rewards card.
In a recent newsletter, Pantera Capital argued that Apple Pay’s inherent shortcoming is its reliance on credit cards as the primary payment infrastructure, something which other systems like Bitcoin bypass.