Competing mobile wallets offer block to Apple Pay
Just a week old and we are seeing a potential blockage to the success of Apple's (AAPL) mobile wallet system. This weekend, Rite Aid and CVS disabled Apple Pay from stores nationwide.
According to analysts, this is a way to support a rival system being developed by Merchants Customer Exchange (MCX), a consortium of merchants that includes Rite Aid and CVS, The Times reported.
"As large-scale retailers, the move by those companies to try to thwart Apple Pay will have a small impact on its ramp, but ultimately it will be consumers who will decide the fate of Apple Pay," said Brian Blair, managing director at Rosenblatt Securities.
MCX, which won't be available until 2015, is developing CurrentC, an app that scans the bar code of the product and links payment through the customer's debit card, according to MCX's website, thus bypassing fees associated with credit cards.
Apple Pay has teamed up with credit cards as its form of payment, MasterCard being one of them.
CurrentC will also keep track of customer habits and apply coupons, loyalty programs and membership accounts, while Apple Pay promises anonymity.
Blair is not surprised rivals are popping up to oppose Apple Pay. He says, "If it is safe, and secure and consumers demand it, more and more retailers, including CVS and Rite Aid, will need to support it. However, given that it's only a couple weeks old, it makes sense that some companies are going to see an opportunity to compete with it and try to introduce their own solution."
The MCX consortium has a broad list of major retailers already on board, including Old Navy, Bed Bath and Beyond and Sunoco and is at 110,000 locations.
"We think consumers should have the ability to pay any way they want," said Ed McLaughlin, chief emerging payments officer at MasterCard. "Apple Pay is the most convenient, most secure, and what's best for consumers," Mr. McLaughlin of MasterCard said. "That's what will win out in the end."
Apple didn't return calls for comment.
