CVS Stores Reportedly Disabling NFC to Shut Down Apple Pay and Google Wallet

[yg17]

There was a link earlier in this thread to a page detailing Target's implementation of CurrentC, and the listed acceptable payment sources were limited to cash, CurrentC, and the Target branded RedCards. I believe once MCX is rolled out, the retailers won't be accepting non-store-branded CCs, but I may be wrong about that. It seems that they wouldn't, though, because one of the stated reasons for developing CurrentC was to bypass the higher CC rates for the lower ACH rates. Maybe those additional store-branded cards will come with lower transaction rates as well.

Either that, or while their store-branded cards are charged the same higher CC rates, they're counting on enough people to use the CurrentC payment to offset them.

But, I have a feeling bypassing those higher CC rates is only a part of reasoning and their main purpose is to gather and keep as much personal information about their customers as possible.

Store branded cards probably have lower rates. When I worked at Target 10 years ago, we could only use our employee discount on gift card, cash or Target credit card. Not on regular credit cards because of their transaction rates.

Anyways, if MCX retailers stop taking Visa/MC/AmEx altogether, they will lose a lot of business. I don't care if they take ApplePay or not, I'm not going to throw a tantrum over it like some members here. But if Target stops taking regular credit cards, I will be shopping elsewhere.

 

[bobenhaus]

I haven't bought any Samsung products for a few years now since I decided I hated their rampant copying. LG has taken the lions share of the money that would have gone to Samsung.

I vote with my wallet. Already looked up the Walgreens nearby.

What you guys don't understand is that eventually Social Media is going to start to blowup in everyone's face and company like Target, Riteaid etc.. will turn off all their social media. Its time to tone down this boycott stuff because whining is not going to change business decisions just because a few are butt hurt.

 

[nj1266]

If that is the only reason then it seems very short sighted, thinking more about it I am starting to think there must be more to this that has not come out, these companies have a lot of smart people working for them and this does not seem like a smart move.

Your giving these brick and mortar companies too much credit. Their profit margins are very thin and they are struggling. When a company is struggling it does irrational acts.

There are only two reasons at work:

1. These companies want to reduce/eliminate CC fees because their profits are shrinking. They want to use ACH accounts instead of CC accounts because fees are much lower. The problem is that ACH account use is not protected in case of fraud and the banks can increase the fees on ACH account use to match that of CC use.

2. They want access to personal data for marketing purposes. They want to send you stupid emails and wasteful mail to convince you to consume their products.

The problem is their approach is not thought through. Apple and Google can easily yank CurrentC from their respective app stores. Banks can easily up the fees on ACH to match those on CC. CurrentC is clunky and insecure and ruins the user experience compared to NFC/Apple Pay.

Their approach has fail written all over it. They are just too shortsighted to see it.

 

[samcraig]

I agree totally and the consumers are just caught in the crossfire

True or not, what else would Tim Cook say? He knows a battle is coming. And his company stands to make money hand over fist with Apple Pay.

 

[bobenhaus]

What you guys don't understand is that eventually Social Media is going to start to blowup in everyone's face and company like Target, Riteaid etc.. will turn off all their social media. Its time to tone down this boycott stuff because whining is not going to change business decisions just because a few are butt hurt.

Also if you read the news about Ritaid because it would make more sense to the ones complaining? Companings are trying to avoid paying credit card transations. Make sense now?

When Apple announced Apple Pay in early September, both Wal-Mart Stores (WMT) and Best Buy (BBY) said they had no plans to adopt the new system. Both are partners in MCX along with other major retailers like Target (TGT), Darden Restaurants (DRI), and Sears Holdings (SHLD).

MCX has been working on a mobile payment solution since 2011, and the driving force behind the effort is to enable the merchants to avoid paying the 2% to 3% credit card transaction fees charged by the likes of Visa Inc. (NYSE: V) and MasterCard Inc. (NYSE: MA). How much do these big retailers dislike paying fees to Visa and MasterCard? Former Walmart CEO Lee Scott is reported to have said, "I don't know that MCX will succeed, and I don't care. As long as Visa suffers."

 

[caesarp]

What you guys don't understand is that eventually Social Media is going to start to blowup in everyone's face and company like Target, Riteaid etc.. will turn off all their social media. Its time to tone down this boycott stuff because whining is not going to change business decisions just because a few are butt hurt.

Except bigger outlets are now reporting on this and laughing at CrappyC and CVS.

From Fortune:

"This Apple Pay boycott seems like a bad idea. Not only are those QR codes clunkier than NFC, but the technology is relatively easy to hack. Alipay, a subsidiary of e-commerce giant Alibaba, pioneered the use of QR payments for smartphones in China until hackers started inserting malicious Trojan horses into the codes. The Chinese central bank stepped in last March and ordered Alipay to stop using the technology."

http://fortune.com/2014/10/26/why-qvc-and-rite-aid-are-blocking-apple-pay/

 

[skellener]

It will be awesome when these guys all cave and bring back both ApplePay and Google Wallet! You know they will.

 

[Noble Actual]

What you guys don't understand is that eventually Social Media is going to start to blowup in everyone's face and company like Target, Riteaid etc.. will turn off all their social media. Its time to tone down this boycott stuff because whining is not going to change business decisions just because a few are butt hurt.

Its not like they do anything important on social media besides promote stuff.

Did Target even use its social media platforms to announce that it got hacked or was it like a couple days later?

Unless your companies like Tesla or T-Mobile who actually use social media to interact with customers, they're all useless.

 

[12vElectronics]

I think Blu Ray would have caught on much better, had it come out sooner. Too many people perhaps are doing it all digitally. Certainly for rentals.

Well, i can't tell you that you are wrong in re NFC/Apple Pay.... just that I think you will be. All phone makers are in a race to put features in their phones. I can't imagine that within a year there will be a single phone manufactured that does not have NFC capability. As for the machine on the merchants end... well... merchants are required shortly by law to install new machines... if they already have to install new readers, might as well put one that has that capability. This was listed as one of the huge plusses for Apple's timing in this technology: That they were doing it at a time that many merchants were already going to have to install new equipment.
Heck... and in Europe, Canada, many other places... NFC is already more prevalent.
But only time will tell, right?

Yes all phone makers are in a race to put more features in their phones. I anticipate within 1 year ALL new smartphones will have NFC.

Here's the thing.. not that many people care. I don't know anybody in real life that is asking for the NFC or cares about paying with their phones.

 

[DotCom2]

If there is going to be a battle between Apple, Google, AmEx, Visa etc. against Walmart, BestBuy, Target, RiteAid etc, I'll place my bet on the Apple consortium.

 

[Sassers]

Your giving these brick and mortar companies too much credit. Their profit margins are very thin and they are struggling. When a company is struggling it does irrational acts.

There are only two reasons at work:

1. These companies want to reduce/eliminate CC fees because their profits are shrinking. They want to use ACH accounts instead of CC accounts because fees are much lower. The problem is that ACH account use is not protected in case of fraud and the banks can increase the fees on ACH account use to match that of CC use.

2. They want access to personal data for marketing purposes. They want to send you stupid emails and wasteful mail to convince you to consume their products.

The problem is their approach is not thought through. Apple and Google can easily yank CurrentC from their respective app stores. Banks can easily up the fees on ACH to match those on CC. CurrentC is clunky and insecure and ruins the user experience compared to NFC/Apple Pay.

Their approach has fail written all over it. They are just too shortsighted to see it.

Yep. Until ApplePay was announced and described, most people (in the US) had no real interest or knowledge about contactless payments. Google Wallet was available and used, but with minimal marketing it hadn't taken off. Apple Pay's security documentation, implementation and ease of use really cast a glaring light on CurrentC's shortcomings.

The more tech sites examine the differences, the more MCX will have to explain and justify their process. If it's rolled out in mid-2015, there will be 6+ months of conversation about ACH's limits, lack of fraud protection, data sharing, etc. and could degenerate into a public relations fiasco for them. If ApplePay hadn't appeared now, I have a feeling the CurrentC rollout in 2015 would have generated less initial examination of its details. It will be interesting to see how it rolls out now.

 

[Tubamajuba]

Except I haven't criticized Apple Pay, I've only commented on the posts in this thread.

Fair enough, but by bashing anybody who wants to use Apple Pay, aren't you accomplishing the same in a roundabout way?

 

[ptb42]

EMV chip cards may not be tokenised, but they are encrypted.

The cards are encrypted. But, once the merchant's terminal gets the data from the card, it's decrypted before making the request to the payment network for authorization.

That's long enough for a compromised terminal to capture the information. It's what happened at Target. An EMV card wouldn't have made any difference.

It happened on a wider scale in the UK. EMV chip terminals were modified either at the (Chinese) manufacturer or before being shipped to merchants. They used the GSM network to send the information to a server in Pakistan. It went on for quite a while before it was discovered:

http://www.telegraph.co.uk/news/ukn...as-netted-millions-from-British-shoppers.html

 

[CPx]

http://fortune.com/2014/10/26/why-qvc-and-rite-aid-are-blocking-apple-pay/

Best part:

This Apple Pay boycott seems like a bad idea. Not only are those QR codes clunkier than NFC, but the technology is relatively easy to hack. Alipay, a subsidiary of e-commerce giant Alibaba, pioneered the use of QR payments for smartphones in China until hackers started inserting malicious Trojan horses into the codes. The Chinese central bank stepped in last March and ordered Alipay to stop using the technology.

LOL.

Good link.

 

[Rajani Isa]

I few thing I don't follow or understand.


3. If CurrentC is meant to save the store 2-3% on CC fees, are they passing that to consumers? Isn't illegal to offer 2 prices or a violation of the TOA with CC's? Sure you could coupon it back, but that's not a total win for us.

Based off the gas prices locally (Oddly enough, it's the southern area of town only. Hope it doesn't spread more), no. As currently most gas stations in southern Medford, OR have a cash/BrandCC price, and a CC/Debit price that's 10 cents or so higher.

And my friend who owns a business charges a fee for CC use if the price is in a certain range.

Please post an email from Apple that you received based on what you watched on your AppleTV streamed from your hard drive. My Google spam filter (I'm a fanboy but don't use iCloud mail) must be trashing all the ones Apple sends me. ;-)

While I don't have AppleTV, I do have both Gmail and iCloud emails on my account. I've never had the kind of emails he has described. Makes me wonder at this point if he had some malware that sold to Apple-imitating spammers.

 

[moderately]

Agreed. Once I realized that there were people in this thread essentially campaigning against NFC simply because Apple is using it, I became somewhat appalled.

These threads have been really good for my ignore list. Now if people would stop quoting them I would be home free.

edit: post 2118? why even bother?

 

[borcanm]

MCX made them sign an exclusivity deal. It makes sense financially for the companies to not use Apple pay anyway.

Knowing Apple the fees for Apple Pay are sky high. On something like a creditcard transaction Visa or Mastercard will charge 2-3% per transaction. Then on top of that Apple will charge it's own fee in percentage. From a retailers point that's enough to drop Apple pay for good. For debit transactions Apple gets a cut out of those transactions too. Basically Apple pay is a more expensive payment service than everything else that brings nothing of use to the table.


MCX is different. Instead of going through Visa or Mastercard (which process credit card payments, they are not the ones who give out the credit) MCX goes straight to the bank from where the credit is issued, avoiding the 2-3% fee. On top of that there's nothing stopping Apple Pay partners from dropping it. So if MCX make their payment system work Apple pay will be finished.

On top of this there's a huge benefit to the customer for using MCX. MCX can introduce a universal loyalty points system. Say you use MCX at CVS to buy something and get loyalty points that you can then use at Walmart to buy something with. That would be amazing.

Well have to see how this plays out.

 

[JeffyTheQuik]

Imagine trying to explain how a debit card works to someone 30 years ago.

Give it a year. Average person hasn't ever seen an Apple Pay transaction, or even NFC for that matter. Once you've seen a few friends do it, or a few random people at a store do it, it will look like magic. And it will be something that people want.

I was there 30 years ago, and got my debit card (OK, 28 years ago, I got my first one), and here's how the explanation went:

"When you use this card, it pulls money from your checking account. It works everywhere Visa does."

It really wasn't that hard.

 

[samcraig]

MCX made them sign an exclusivity deal. It makes sense financially for the companies to not use Apple pay anyway.

Knowing Apple the fees for Apple Pay are sky high. On something like a creditcard transaction Visa or Mastercard will charge 2-3% per transaction. Then on top of that Apple will charge it's own fee in percentage. From a retailers point that's enough to drop Apple pay for good. For debit transactions Apple gets a cut out of those transactions too. Basically Apple pay is a more expensive payment service than everything else that brings nothing of use to the table.


MCX is different. Instead of going through Visa or Mastercard (which process credit card payments, they are not the ones who give out the credit) MCX goes straight to the bank from where the credit is issued, avoiding the 2-3% fee. On top of that there's nothing stopping Apple Pay partners from dropping it. So if MCX make their payment system work Apple pay will be finished.

On top of this there's a huge benefit to the customer for using MCX. MCX can introduce a universal loyalty points system. Say you use MCX at CVS to buy something and get loyalty points that you can then use at Walmart to buy something with. That would be amazing.

Well have to see how this plays out.

Apple gets paid by the credit card company not merchant

 

[caesarp]

MCX made them sign an exclusivity deal. It makes sense financially for the companies to not use Apple pay anyway.

Knowing Apple the fees for Apple Pay are sky high. On something like a creditcard transaction Visa or Mastercard will charge 2-3% per transaction. Then on top of that Apple will charge it's own fee in percentage. From a retailers point that's enough to drop Apple pay for good. For debit transactions Apple gets a cut out of those transactions too. Basically Apple pay is a more expensive payment service than everything else that brings nothing of use to the table.


MCX is different. Instead of going through Visa or Mastercard (which process credit card payments, they are not the ones who give out the credit) MCX goes straight to the bank from where the credit is issued, avoiding the 2-3% fee. On top of that there's nothing stopping Apple Pay partners from dropping it. So if MCX make their payment system work Apple pay will be finished.

On top of this there's a huge benefit to the customer for using MCX. MCX can introduce a universal loyalty points system. Say you use MCX at CVS to buy something and get loyalty points that you can then use at Walmart to buy something with. That would be amazing.

Well have to see how this plays out.

No. MCX is for the retailer. To help avoid interchange fees and get customer data. It's clunky system is not primarily focused on benefits to the customer. But they will say it is.

Read and learn. http://fortune.com/2014/10/26/why-qvc-and-rite-aid-are-blocking-apple-pay/

 

[JeffyTheQuik]

MCX made them sign an exclusivity deal. It makes sense financially for the companies to not use Apple pay anyway.

Knowing Apple the fees for Apple Pay are sky high. On something like a creditcard transaction Visa or Mastercard will charge 2-3% per transaction. Then on top of that Apple will charge it's own fee in percentage.

The retailer pays exactly 0.000000000000000000000% as a surcharge to Apple. The credit card processing companies pay .25% of the transaction cost (of the 3%, Visa/MC get 2.75%, Apple gets 0.25%)

On top of this there's a huge benefit to the customer for using MCX. MCX can introduce a universal loyalty points system. Say you use MCX at CVS to buy something and get loyalty points that you can then use at Walmart to buy something with. That would be amazing.

Well have to see how this plays out.

That would be amazing.

 

[KdParker]

What you guys don't understand is that eventually Social Media is going to start to blowup in everyone's face and company like Target, Riteaid etc.. will turn off all their social media. Its time to tone down this boycott stuff because whining is not going to change business decisions just because a few are butt hurt.

??turn off their social media?

What are you talking about? Also social media affects business decisions everyday.

 

[borcanm]

Yes all phone makers are in a race to put more features in their phones. I anticipate within 1 year ALL new smartphones will have NFC.

Here's the thing.. not that many people care. I don't know anybody in real life that is asking for the NFC or cares about paying with their phones.

Yep. Debit and Visa cards work just fine.

 

[JeffyTheQuik]

iBet (see what I did there?) we can get this to 4000 posts!

Of them, I bet about 5 will be factual and non-opinionated, but I'm being an optimist.

 

[Benguitar]

I don't use ApplePay yet, however I am looking forward to using it when I finally get around to updating my iPhone.

However I think this is a crap move on CVS's part to disable NFC for ApplePay and Google Wallet.