How can it be collusion when CurrentC is open to any retailer to join. It is called competition.
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Can someone explain to me how CurrentC isn't illegal collusion?
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How can it be collusion when CurrentC is open to any retailer to join. It is called competition.
Never said it was. But it is still anticompetitive behavior. It's somewhat akin to VISA making merchants agree to disallow MasterCard and AMEX payments
OP: you're confusing "collusion" (not illegal) with the more specific action of "price fixing" (or cartel) (illegal).
I have a bit of sympathy with retailers on this to be honest. The high street is struggling as it is and if retailers are being charged an extra fee by banks to enable NFC payments, then I am not surprised they are blocking it. It is a cost that is unnecessary to them at present.
In a time where shops are struggling to stay open because of internet shopping changing the way people purchase anything from clothes to electronics, paying for the use of yet another form of payment is unwelcome. I know many smaller shops don't accept credit cars because of the admin fee's banks impose, so NFC could be very similar. I did read Apple were charging retailers to allow Apple Pay payments so in reality they have a choice. It is not like a consumer is going to refuse to buy something because they have to get their card out of their wallet or purse is it?
In a time where shops are struggling to stay open because of internet shopping changing the way people purchase anything from clothes to electronics, paying for the use of yet another form of payment is unwelcome. I know many smaller shops don't accept credit cars because of the admin fee's banks impose, so NFC could be very similar. I did read Apple were charging retailers to allow Apple Pay payments so in reality they have a choice. It is not like a consumer is going to refuse to buy something because they have to get their card out of their wallet or purse is it?
Can someone explain to me how CurrentC isn't illegal collusion?
Simple solution to it all, pay in cash!!! I know allot of local businesses have quit taking credit and debit cards because of the hacks and fraud and now prefer cash only. Most places will even give a discount for cash.
We used cash for hundreds of years and never had any issues before? That's because folks where taught how to count and what responsibility was in school, now they don't teach that anymore.
Simple solution to it all, pay in cash!!! I know allot of local businesses have quit taking credit and debit cards because of the hacks and fraud and now prefer cash only. Most places will even give a discount for cash.
We used cash for hundreds of years and never had any issues before? That's because folks where taught how to count and what responsibility was in school, now they don't teach that anymore.
Your analogy is off. CurrentC is not making merchants agree to disallow Apply Pay. The merchants have simply chosen not to accept Apple pay. This is akin to a new credit card forming and retailers not accepting it. Some of my utilities and online stores, for instance, don't accept Amex as a form of payment. Some local store don't accept checks. Some restaurants accept cash only. Would you argue these practices are illegal?
^^^THIS^^^
Nothing illegal going on here.
We have not seen anything as these new payment systems will increase in number next year when the new rules come into play. Apple Pay will just be one of many competing for it's existence!
It will be years to see who survives and who does not. I am betting that Apple will be a player but if it is restricted to only the latest iPhones, it will always have competition and lots of it!
How is this different the banks creating the Mastercard credit card. They're not preventing all payment methods, so its nots preventing consumers from buying anything.
Just because they chose to disable NFC, doesn't mean what they're proposing is collusion.
Just because they chose to disable NFC, doesn't mean what they're proposing is collusion.
Umm...
HOWEVER, it is not "collusion" in any actionable sense because it's not something that's fixing prices or supplies of the company's products to consumers. As you note, they're seeking to establish a common mobile payments platform and not wishing to take other forms of mobile payments. Just as a merchant can choose not to take Amex or Diners Club.
I expect awkwardness of use and security concerns will largely quash the whole scheme in time.
I don't think this is illegal collusion simply because some retailers have refused to implement Apple Pay. There is no real detriment to consumers here - not being able to use Apple Pay isn't going to mean that they won't be able to pay - there are many other payment methods which have all worked before Apple Pay even existed. I don't see an argument here.
It's not like they're pushing up prices either for consumers. Retailers should be free to choose which payment system to implement, not forced to implement a payment system in the name of 'promoting competition'. If anything, it's the job of Apple, Google and others to convince retailers to implement their payment systems as well. If they're not competitive enough, retailers won't join Apple Pay or Google Wallet- it's a business decision.
It's not like they're pushing up prices either for consumers. Retailers should be free to choose which payment system to implement, not forced to implement a payment system in the name of 'promoting competition'. If anything, it's the job of Apple, Google and others to convince retailers to implement their payment systems as well. If they're not competitive enough, retailers won't join Apple Pay or Google Wallet- it's a business decision.
Point of clarification: there's not really anything for retailers to implement for Apple Pay. As mentioned here and elsewhere, if NFC is enabled and there's no weirdness to how the POS is set up, Apple Pay will simply work. All the setup is with the payment network and the issuing bank.
Correct, but they're turning off that functionality which seems to be raising the ire of many Apple folks.
Yes, that's certainly a slap in the face. Hell hath no fury like a new iPhone owner scorned or something like that.
That exclusivity clause may end up coming back to bite the MCX participants. I get what they're trying to do; even if not a phenomenal success it has (had) the potential to give them some negotiating leverage with Visa/MC/etc.
I think Apple Pay is (will) bring more attention to mobile payments overall (opportunity for Google); especially as the issuers (banks) do more marketing to their customers about the program. The enhanced security is a big win for the banks, so Apple essentially gets a bunch of free marketing / market awareness.
No one who cares about the quality of apps on the App Store should be cheering for Apple to block CurrentC.
They aren't trying to remove competition. As a business they also have the right to determine which payment methods they will accept or not. Some businesses do cash only, or won't take AMEX, etc. Is that illegal? NO.
Merchants pay a fee to the credit card companies & some choose not to accept those with higher fees or any at all.
I haven't been keeping up which stores are on board, but no way does their total annual sales represent a majority of US gross sales. I'd guess they don't even cover 10% of total sales. So even if price fixing was somehow involved in this method of payment, they don't have the power to affect market prices.
Yes they are. Part of the agreement is that they cannot accept any other mobile wallet
Instead of made up definitions and unsupported opinion without legal basis, here is a post in another thread with an opinion from the FTC that is on point.
https://forums.macrumors.com/posts/20248856/
If the terms of the MCX agreement contain an exclusivity clause, it would certainly merit antitrust examination.
https://forums.macrumors.com/posts/20248856/
If the terms of the MCX agreement contain an exclusivity clause, it would certainly merit antitrust examination.
Stop spreading false info. Every day another person gets it wrong. They are taking a cut of the fee paid to the credit card companies because they are in essence reducing the chance of fraud and saving them money. There is no extra fee. In fact, with Apple Pay the merchant is paying the lowest card present fee.
Enabling NFC payments doesn't cost merchants more, except in the cost of upgrading their terminals with NFC readers. However, I believe some credit card companies charge different rates for transactions done with physical cards vs contactless payments. In that respect, NFC could be slightly more expensive than traditional credit cards.
That being said, Apple got the banks to agree to charge merchants the same rate for Apple Pay as they charge for traditional credit card payments, so for merchants who already have NFC, Apple Pay costs them nothing extra. It can only bring in revenue.
Also, if CVS and Rite Aid were already part of MCX, why did they wait until Apple Pay was up and running to shut off their NFC readers? Why didn't they shut the readers off the day they joined the consortium? The overall consortium may not be illegal, but the timing is suspicious.
That being said, Apple got the banks to agree to charge merchants the same rate for Apple Pay as they charge for traditional credit card payments, so for merchants who already have NFC, Apple Pay costs them nothing extra. It can only bring in revenue.
Also, if CVS and Rite Aid were already part of MCX, why did they wait until Apple Pay was up and running to shut off their NFC readers? Why didn't they shut the readers off the day they joined the consortium? The overall consortium may not be illegal, but the timing is suspicious.
This..
Competitors working together for a common interest is counter to how a healthy and free system of commerce should operate. Thank you for clarifying my words.
MCX is no different to a bunch of retailers joining together to destroy Ford cars by refusing to sell gas to Fords, service Fords, or parts for Fords. Then, people claiming that they have a right to refuse to service Ford cars.
They may have the right to independently choose to disallow servicing Ford cars, but they can't collectively decide to disallow it.
In due respect, your analogy does not make any sense. Anti-trust laws have to do with protecting the consumer, not another retailer. The consumer is no worse off not being able to use Apple Pay at a store that choose not to accept it. The consumer can always go to another retailer that offers it (that is called competition). If the consumer chooses to shop at the retailer that does not accept Apple Pay, their are still other means to pay for the goods (cash, credit or debit). The consumer is in no way harmed.
An "inconvenience" of not being able to utilize Apple Pay is simply an inconvenience. At the end of the day, the consumer decides if they want to deal with the inconvenience or not.
This is all about Adam Smith's invisible hand at work.
Antitrust concerns seem legit.
Read the following from http://www.ftc.gov/sites/default/files/attachments/us-submissions-oecd-and-other-international-competition-fora/1210payment_systems_US.pdf:
(Emphasis mine)
Read the following from http://www.ftc.gov/sites/default/files/attachments/us-submissions-oecd-and-other-international-competition-fora/1210payment_systems_US.pdf:
(Emphasis mine)
This may be considered collusion or anti-competitive. I do not know all of the details, but if what the OP posted is correct, we have some issues:
-A group of industry players have grouped themselves together in the interests of profit;
-This grouping has been, in part, to advance a new payment system to eliminate credit card processors like Apple Pay, or both;
-If successful, there would be a reduction of competition and potentially increased prices (e.g., per transaction fees) as a result.
I still am not clear on the facts:
1. Is Apple acting as a merchant bank? That is, do they work directly with the credit card companies and get a set % per transaction rate? Where they then charge a higher rate to the business accepting Apple Pay?
Or:
2. Is Apple just a middle-man between the merchant bank and the merchant themselves? Remember, the way it works is a merchant (a business) has direct relationships with a merchant bank who gives that business a set % per transaction fee. That merchant bank will have its own wholesale % per transaction fee so they'll make a margin per transaction with the businesses that use them to process credit cards.
-A group of industry players have grouped themselves together in the interests of profit;
-This grouping has been, in part, to advance a new payment system to eliminate credit card processors like Apple Pay, or both;
-If successful, there would be a reduction of competition and potentially increased prices (e.g., per transaction fees) as a result.
I still am not clear on the facts:
1. Is Apple acting as a merchant bank? That is, do they work directly with the credit card companies and get a set % per transaction rate? Where they then charge a higher rate to the business accepting Apple Pay?
Or:
2. Is Apple just a middle-man between the merchant bank and the merchant themselves? Remember, the way it works is a merchant (a business) has direct relationships with a merchant bank who gives that business a set % per transaction fee. That merchant bank will have its own wholesale % per transaction fee so they'll make a margin per transaction with the businesses that use them to process credit cards.