In a bold move, Apple Pay was recently rejected from CVS Pharmacy and Rite Aid. Essentially, the two drugstores barred Apple Pay users from using their mobile wallets to pay for everything from lipstick to roll-on deodorant. CVS and Rite Aid are joining their counterparts Walmart, Kmart, Lowe’s, Gap, Target and other retailers, in refusing to accept Apple Pay.
In response, Apple Payers went Apple-plectic with rage, launching a Twitter tantrum from Apple supporters.
Never has there been a more monopolistic, misguided corporate policy. It’s decidedly anti-consumer, anti-democratic and anti-American. Who would in their right mind — unless they wanted to lose loads of money or go out of business — arbitrarily say no to some 70 million to 80 million new Apple iPhone 6 and 6+ users (that’s the number of new Apple Pay-equipped phones expected to be sold by the end of the year) who want to pay for their dandruff shampoo with their smartphones. There are more than 300 million Apple smartphone users worldwide.
Social media rebellion
Tweeter Jodi Spangler quickly expressed her feelings about the drugstore drubbing: “I’m boycotting CVS and Rite-Aid until they allow Apple Pay. I should be able to use whatever legal tender I want and not be forced by them.”
In support, Harry McCracken tweeted: “I may go to a CVS, fill my cart with expensive products, then try to pay with Apple Pay. Silent protest.”
The above are buying, and more important, paying customers. So why would merchants want to ban or block them from the checkout stand? Another Tweeter, Brian Tong, replied: “The idiotic CVS/Rite-Aid decision is all about the money.”
Indeed, CVS and Rite-Aid are part of a rival Walmart-led Merchant Customer Exchange (MCX) consortium that is on the cusp of rolling out CurrentC, a competing mobile payment system that will allow them to avoid credit card-swipe processing fees, which generally amount to 2 percent to 4 percent for each individual transaction, or about $30 billion annually, according to the National Retail Federation. These are fees that slice deeply into Walmart’s and other retailers’ already skinny profit margins. Walmart, in particular, based on its 2014 income statement, would realize a $3.6 billion bump-up in profits and a $55 billion increase in shareholder value if it could bypass credit cards and convert all Apple Pay and credit card fees at 2 percent to debit cards at 0.5 percent.
Apple Pay vs. CurrentC
We applaud Walmart, CVS, Rite-Aid and their retail brethren for trying to build a better mousetrap — one that isn’t controlled by third-party financial companies who gobble up percentage points of revenue for their services. We just don’t think that we as consumers should be forced to accept that mousetrap unless it’s been thoroughly vetted against the current competition. Let CurrentC go head to head against Apple Pay, Google Wallet and all other contactless credit card challengers in the marketplace and let customers decide their preferred form of payment.
Is that too much to ask? Maybe it is, if CurrentC backers believe Apple got out to an early marketing lead from which they feel they can’t recover. And there are also those legendary hurdles of Apple quality and innovation they’ll have to overcome, including:
Apple Pay’s superior privacy
Apple Pay doesn’t tell retailers a thing about you, so they can’t go back and mine your data to pitch you other products. Apple Pay is virtually anonymous to your transaction. It doesn’t care or know whether you bought cola or colon cleanse. On the other hand, CurrentC will peddle coupons and loyalty rewards promotions based on your past purchases, such as, “If you like Excedrin, here’s 10 percent off on your next purchase of Tylenol gel caps.”
Apple Pay’s superior security
When a user buys something at a participating store, a one-time payment code is generated. Merchants get that one-time code instead of your real credit card number. Credit card numbers will not be stored on your phone. Even if hackers got that substitute number, they wouldn’t be able to generate the verification code without having possession of your phone.
Apple’s amazing convenience
You upload your credit card or cards once to use the program, and that’s it. Then you wave your phone in front of a sensor to make payment. Half the time, smartphone users are holding their phone in their hands anyway to text, tweet, Google or Facebook. Even if your iPhone 6 is in sleep mode, you can simply hover it near a store’s NFC (near-field communications) reader to make the transaction go through. Apple Pay doesn’t require you to set up a special account or preload it with money.
Unlike CurrentC, there’s no app you must open to pay, no special password to remember. In contrast, CurrentC uses a QR app that either creates a code on your smartphone or requires you to take a photo of a code displayed on the cashier’s screen to transfer money from your bank account. This cumbersome QR shuffle doesn’t compare in user experience with tapping an iPhone against an in-store NFC reader.
Let it be the consumer’s choice
Capitalism is all about consumer choice, but the MCX bullies aren’t providing one. Indeed, it isn’t rolling out its system until next year. It was caught flat-footed by the more fleet-footed Apple. Yet MCX expects consumers to just sit tight while having successfully pressured CVS and Rite Aid into pulling Apple Pay without offering a mobile payment alternative.
This policy is not only disarming Apple, but also disabling customers. If CurrentC is superior, let MCX prove it in an open, honest competition. Don’t try to fix the fight before it has even started.
Then, in its own statement of why it won’t support Apple Pay, Walmart, the big brother of merchants, had the effrontery to say: “MCX members believe merchants are in the best position to provide a mobile solution because of their deep insights into their customers’ shopping and buying experiences.”
What about consumers’ insights into retailers — who are supposed to be supporting their interests and likes.
Tweeter Steve Bang had an instant response to CVS’ and Rite Aid’s hastily and poorly written prescription, which should be pulled before it does further damage to consumers and to the retailers’ bottom line.
“701,281 Facebook ‘likes’ for Rite Aid? Remove your ‘like’ if you don’t agree w/ decision to not support Apple Pay and Google Wallet.”
Well tweeted. Let the consumer decide. At least, Twitter nation has spoken, Apple-solutely!