MCX Confirms Retailer Exclusivity for CurrentC Mobile Payments, but No Fines for Leaving Consortium

[oddnendz]

Right. But if you had a way to take payment via some alternative that wouldn't involve having to pay as much via Square, would you at least offer that alternative? And would you cut your pricing so you couldn't make that extra profit or would you simply enjoy that extra profit.

Best I can tell, this is not about doing away with CC. Retailers would still price with an assumption of being paid with CC. However, when consumers would use an alternative (like they do when they pay with cash or check now) the retailer would get to keep the extra profit. I'm confident that's what you would do in your business if you had such an alternative to Square.

Did you miss the quote from the former Walmart exec saying CurrentC was all about hurting Visa?

As far as extra profit, they only get it if they convince people to give up their debit cards for CurrentC (which I will not be doing). And if forced to stop using my debit card for CurrrentC, I'll switch over to my CC to make sure they get the point that over my dead body will I use CurrentC.

 

[HobeSoundDarryl]

CurrentC wants 2 things-
1.escape swipe fees
2.track the customer

They plan to accomplish 1. by storing all your bank info in the cloud. Eliminate the middleman that is providing fraud protection for the customer. Do they step in and protect the customer? Unclear, but unlikely. Apple has not asked for my banking info. You can paint the big bad banks black and I will not argue. But set Wallmart next to them and I see little difference. Wallmart is not the little guy. Walmart is not acting in your best interests. Apple is selling something that I want- a more secure and more private way of doing what I do already.

Apple's solution is founded in promoting my privacy in a more robust way than previously available. This is at odds with 2.

Maybe we want weaker CC companies, but I see little in common between Apple and MCX for a unified approach.

I'm not arguing that CurrentC is a better system. I don't even see this as CurrentC vs. Apple Pay. Instead I see this as CurrentC vs. the "as is" system that underpins Apple Pay (which is basically the Credit Card system that has been in place for decades).

If we try to spin this as CurrentC vs. Apple Pay, it seems obvious that Apple Pay is the better system for some of the very reasoning you've written. But don't fool yourself into believing that Apple not tracking transactions means that transactions are not being tracked (just Apple is not tracking them). Don't fool yourself into believing using Apple Pay means there's no data to mine or sell- just Apple is not mining or selling such data. Underneath Apple Pay are still the very same big banks who underpin the transaction. They are not adopting the same "we are not Google" policies as Apple is spinning with Apple Pay.

As to the implication of "wanting weaker CC systems", nobody is arguing for that. We all want fool-proof, easy, 100% secure transactions via whatever system we use to pay for things. Apple Pay has many advantages along these lines but Apple Pay could work the same way atop CurrentC and other such platforms too if the parties involved wanted it to do so.

 

[Arran]

But if Apple Pay was evolved to also work on a CurrentC-type platform, then the ease-of-use argument evaporates...

Until something goes wrong.

You seem to be ignoring the considerable non-material services that credit card companies offer to their cardholders.

The classic consumer credit-card product and CurrentC are completely different. Like steak and meatloaf. Serving meatloaf in a 5-star Michelin restaurant (i.e., giving it a superficial Apple-Pay-like experience) does not make it steak.

 

[UnfetteredMind]

But if there are so few phones with NFC, why put in a clause that penalizes members from accepting it? I mean if nearly everyone has a credit card, and you're still going to accept those, and a small fraction of those people want to pay with NFC, what's the difference? If MCX has the better solution, they will win. They know they don't, so they rig the game. I don't dispute that it's in a merchant's best interests to reduce fees from a profit standpoint, but the practices here are not exactly in the customer's best interest, and that's who is going to drive said profits. Now the narrative of "big bad CurrentC" is creeping into the mainstream. Apple and Google are playing an underdog role. You can't make this stuff up! CurrentC's goose is cooked.

These merchants would have been smarter to have turned off NFC when they first installed the POS terminals. It's better to have never offered it than to offer it and then take it away.

Pay will also work with Debit cards, so by turning off NFC, they're also eliminating this option.

 

[HobeSoundDarryl]

Isn't there a huge contradiction in this statement you made?? MCX is shutting down Apple pay, on which they banking and hoping will make their software successful........

No, select stores associated with MCX are shutting down NFC in general (which does include Apple Pay but also other options like Google Wallet). I doubt they want to shut NFC down forever- just until they can get their competing platform in place with hopes that consumers will choose to use it at least some of the time instead of continuing to allow the banks to bite into every transaction the very same way as they have for decades in the current CC platform.

I would guess that the MCX players would LOVE, LOVE, LOVE it if both Google and Apple would make their software ALSO work with CurrentC. And if so, they could realize their goal of recapturing some of their profits taken by the big banks through encouraging their customers to use Apple Pay, Google Wallet and others.

 

[Robert.Walter]

Right there's the key line. For about 4-5 days now, every one of these threads has filled in with an abundance of attacks against the non-Apple alternative. No surprise- that's almost a universal rule for all things related to Apple. Post after post about foolishly turning away money is right but implying that these huge retailers are dumb is wrong. There have a reason for trying to go another way and there it is.

Apple's solution piles on to a long-term leech arrangement that enriches the big banks. Everything we buy with credit cards and now Apple Pay dings the seller a few percentage points in transaction costs. Apparently Apple takes a very little slice of that and the banks take the rest. It's no small change. A retailer with an 8% profit who is dinged 2% (of revenues) in total when they take a credit card (or now Apple Pay), is redirecting 25% of their profit to these banks. Imagine if AT&T, Verizon, etc took 25% of Apple's profits in order to cover their part of making the iPhone business go. Would Apple be dumb for trying to find another way to do business to reduce or eliminate that 25% cut? Of course not, and "we" would be finding great fault with AT&T, Verizon, etc for taking such a big bite out of Apple's profits rather than marginalizing it as "a cost of doing business" and so on.

Apparently this CurrentC is an attempt to somewhat replicate a mobile payment option while (maybe) cutting out the leeches. For consumers, we would still get to buy things at the exact same price (so there's no higher cost burden for us) but the merchant would get to keep more of their profit rather than lose it to gigantic banks who have little-to-nothing to do with the work of driving each sale.

As a point of comparison, visit an TV thread. There is an abundance of gripes that TV apps require a cable subscription. In other words, this same crowd cries out for Apple to cut out the "greedy" cable company middlemen with that product. Yet here "we" appear to be fully supportive of the big bank middlemen that underpin Apple Pay... so much so that we are faulting retailers for trying to work out a system to cut them out. Why? Because Apple Pay is built to work with the existing leech system rather than endorsing a CurrentC concept like cutting out those middlemen. There is no more greedy entity than the big banks, but "we" find no fault with them here.

Too bad Apple Pay didn't take on the mobile payments business in a similar way. In other words, instead of partnering with the leeches (and thus offering yet another way to further enrich the big banks), what if Apple had chosen to implement Apple Pay as CurrentC appears to be trying to do (cut out those middlemen bankers)? Then, we could have the great, ease-of-use benefits of Apple's option while helping ALL businesses be more profitable than they can be "as is". Instead of having to pitch retailers on partnering with Apple Pay, all retailers could keep more of their profits on every sale by encouraging Apple Pay.

Are there things wrong with CurrentC concept? Of course. But the one thing that appears to be better is this goal of cutting out that transactional cost. It wouldn't take a lot for Apple to make Apple Pay also work with CurrentC. Then those businesses wanting to continue to send a couple percent of their profits to the big banks could stick with "as is" solution and those wanting to keep that profit could use CurrentC. For us consumers, Apple Pay would work the exact same way as a kind of UI layer atop whichever method is being used by a given retailer. Quicktime or Safari runs atop both OS X and Windows OSs. Those are very different systems behind the scenes but the part "we" use is largely the same. Apple Pay could work like that too with both platforms.

In other words, Apple almost shouldn't care about the CurrentC initiative. Just make Apple Pay work with that platform too and everybody (except the big banks) would be happy. Many of "us" are treating CurrentC like it's some kind of attack against Apple. It's not. It's just a bunch of companies mostly trying to cut a hefty albatross cost. Apple could help them do that with Apple Pay and the end result for us consumers would be transparent (we wouldn't even know if it was the "as is" or CurrentC platform underpinning any given transaction).

I think your argument is flawed. Plus it seems hardly neutral in its rhetoric.

If your fictional merchant with 8% profit, then they are not losing 25% of that, because profit is calculated after expenses which a card swipe fee is.

Rather, by paying card fees, the merchant is losing 20% of total potential profit (all other things being equal).

But in reality, these merchants long ago raised their prices to defray all or part of the swipe fee.

The CurrentC USP is to allow margin enhancement by capturing fees that otherwise went to the card companies and banks. (As well as customer data aggregation possibilities.)

In addition, these merchants are unlikely to share any significant part of their CurrentC winnings with their customers who will be giving up the benefits that they currently enjoy with credit cards, like warranty extension, customer biased dispute resolution and fraud protection, and loyalty points and frequent flyer miles, etc. if these merchants were so disposed to share, they would have been offering a cash rebate since years.

Your analysis seems so biased against banks, but for the struggling merchant, and absent any real analysis through the customer viewpoint that I have to wonder if it is a straw man on AstroTurf.

 

[oddnendz]

I'm not arguing that CurrentC is a better system. I don't even see this as CurrentC vs. Apple Pay. Instead I see this as CurrentC vs. the "as is" system that underpins Apple Pay (which is basically the Credit Card system that has been in place for decades).

If we try to spin this as CurrentC vs. Apple Pay, it seems obvious that Apple Pay is the better system for some of the very reasoning you've written. But don't fool yourself into believing that Apple not tracking transactions means that transactions are not being tracked (just Apple is not tracking them). Don't fool yourself into believing using Apple Pay means there's no data to mine or sell- just Apple is not mining or selling such data. Underneath Apple Pay are still the very same big banks who underpin the transaction. They are not adopting the same "we are not Google" policies as Apple is spinning with Apple Pay.

As to the implication of "wanting weaker CC systems", nobody is arguing for that. We all want fool-proof, easy, 100% secure transactions via whatever system we use to pay for things. Apple Pay has many advantages along these lines but Apple Pay could work the same way atop CurrentC and other such platforms too if the parties involved wanted it to do so.

You keep talking about credit cards. You do realize that CurrentC has nothing to with credit cards (other than destroy them). To me, CurrentC is just a convuloted version of an electronic check. Instead of a check, you authorize an app to access your banking account.

If you want to correctly compare ApplePay/CurrentC, imo, you should think about this in terms of debit cards (which you can use with Apple Pay).

 

[a.coward]

Funny how MCX (and many other companies for that matter) are
twisting the concept of "privacy". Privacy, to me, is not just about
you (MCX) keeping my information safe and not having you share
my information: it's about keeping this information (SSN, DL number,
bank account number, etc.) away from you in the first place.

 

[oddnendz]

No, select stores associated with MCX are shutting down NFC in general (which does include Apple Pay but also other options like Google Wallet). I doubt that want to shut it down forever- just until they can get their competing platform in place with hopes that consumers will choose to use it instead of continuing to allow the banks to bite into every transaction the very same way as they have for decades in the current CC platform.

I would guess that the MCX players would LOVE, LOVE, LOVE it if both Google and Apple would make their software ALSO work with CurrentC. And if so, they could realize their goal of recapturing some of their profits taken by the big banks through encouraging their customers to use Apple Pay, Google Wallet and others.

There better an opt-out switch. I don't want any data going to retailers.

 

[ke-iron]

Amen!

There is even a petition going for it

https://petitions.whitehouse.gov/pe...option-usa-protect-privacy-consumers/jx4fvq7k

This should be posted as a headline since its a direct response or reaction to the CVS and Rite Aid scandal. It should also be posted in more places so people who wants this kind of push knows about it and can vote to make it a reality. I want this to happen and only knew about it because it was posted here on a comment. This is huge, should be a headline topic!

 

[ee4life]

Now if someone- let's say Apple- chose to take on such a system so that that extra profit could stay with the retailer instead of flowing to the banks, do we take any issue with that? Rhetorical (whatever Apple endorses is the one and only way things should be).

So yes, the fact that you might have a bank account at- say- Chase Bank and you might be using Apple Pay to pay with a Chase Card vs. an idea of paying by some other means that doesn't involve that Chase Card (and thus no fees to Chase for that transaction) may have some perceived irony in it. However, if we buy that product with cash or check now, we pay the same price to the retailer and Chase doesn't get a couple of percent of those revenues. Is that bad?

It depends, does that system require me to hand over a bunch of sensitive personal information to be stored in the cloud? Does it work with POS systems that are already installed at hundreds of thousands of merchants? Does it allow me to enjoy the same benefits in terms of rewards, fraud protection, etc that my Chase card does?

CurrentC is on the wrong side of every one of those questions. It is a complete non-starter for the consumer. You're asking everyone to give more consideration to the merchant than they give themselves. Might as well tell them to ignore a sale price and just offer to pay retail. Good luck with that.

 

[HobeSoundDarryl]

Did you miss the quote from the former Walmart exec saying CurrentC was all about hurting Visa?

OK so what does that mean? How do they "hurt" Visa? By giving Visa less of their revenues for everything they sell. I feel no particular sympathy to a company the size of Walmart but think it through to the small Mom & Pop. Try the local bike shop or non-franchise restaurant. That 2% or so can be a lot of their profit. Do they "hurt" Visa by making other payment options available to their customers such that some of their customers choose to pay through those alternatives? Could it "help" that Mom & Pop store though if some customers would pay through such alternatives so that that 2% or so stays with Mom & Pop?

As far as extra profit, they only get it if they convince people to give up their debit cards for CurrentC (which I will not be doing). And if forced to stop using my debit card for CurrrentC, I'll switch over to my CC to make sure they get the point that over my dead body will I use CurrentC.

They won't force anything on anyone. They just offer it up as an alternative. Ever use PayPal? That's an alternative platform too. To set it up you link it to your bank account and you can make virtual check transactions when you buy something. PayPal will also allow a person to attach some credit cards to the file so you can also pay with CC through PayPal. Then it defaults to the virtual check transaction. Every single thing I buy that works with PayPal could be paid with a CC but sometimes I'll use the bank transfer (default). Paypal is not forcing me to pay only one way. And I doubt this would force anything either.

 

[a.coward]

You keep talking about credit cards. You do realize that CurrentC has nothing to with credit cards (other than destroy them). To me, CurrentC is just a convuloted version of an electronic check. Instead of a check, you authorize an app to access your banking account.

If you want to correctly compare ApplePay/CurrentC, imo, you should think about this in terms of debit cards (which you can use with Apple Pay).

That's what I was led to believe also, based on earlier reports of how
CurrentC worked. But if you read the article or the blog post, you see
this:

Provide consumers with multiple ways to pay at their favorite merchants, including merchant gift cards, credit cards and debit accounts and personal checking accounts. MCX has plans to add additional forms of payment, including credit cards.​

So, it looks like CurrentC may support Credit Cards after all -- unless
it's just referring to store credit cards.

 

[Arran]

You're asking everyone to give more consideration to the merchant than they give themselves...

You know, I'd entertain that if there was some quid-pro-quo.

But there isn't. Zero, zip, nada.

 

[CB1234]

No, select stores associated with MCX are shutting down NFC in general (which does include Apple Pay but also other options like Google Wallet). I doubt that want to shut it down forever- just until they can get their competing platform in place with hopes that consumers will choose to use it instead of continuing to allow the banks to bite into every transaction the very same way as they have for decades in the current CC platform.

I would guess that the MCX players would LOVE, LOVE, LOVE it if both Google and Apple would make their software ALSO work with CurrentC. And if so, they could realize their goal of recapturing some of their profits taken by the big banks through encouraging their customers to use Apple Pay, Google Wallet and others.

Ok then going by your argument that MCX sole purpose is to cut out charges levied by banks and credit card companies, then why do they need a lot of personal information on their customers? Why don't they forego collecting information on their users ?.

To cut out 2-3% charges, they don't need all the personal information, do they?.

I think bankers should do bankers job, retailers should do retailers job... If retailers cut out the bankers and credit card companies, then what, you want bankers to start opening retail stores so that they can maintain their profits?

 

[Larry-Bloom]

No Fines, but

No Fines, but they probably keep the money that they gave them to sign up...

 

[furi0usbee]

In that illustrated example of how to use the service, they forgot the panel where the hacker is stealing your SSN, license number, checking info, and email address, presumably so he can email you later and tell you how stupid you are for using CurrentC.

 

[flat five]

Ok then going by your argument that MCX sole purpose is to cut out charges levied by banks and credit card companies, then why do they need a lot of personal information on their customers? Why don't they forego collecting information on their users ?.

To cut out 2-3% charges, they don't need all the personal information, do they?.

why do banks need a lot of personal information on their customers? starting from scratch, you'd give out more personal info to use apple pay than you would to sign up for CurrentC.

[edit] similar sentiments as ctdonath's earlier itt..
https://forums.macrumors.com/showthread.php?p=20245603#post20245603

 

[AllieNeko]

Exec 1: "Should we keep this useless method or switch to the one where potentially millions of people can use it?"

Exec 2: "Yeah, let's do it the dumb way."

Exactly what will, likely, happen. At least this confirms that MCX did request CVS and Rite-Aid disable contactless. But what about Meijer?

 

[HobeSoundDarryl]

Until something goes wrong.

You seem to be ignoring the considerable non-material services that credit card companies offer to their cardholders.

The classic consumer credit-card product and CurrentC are completely different. Like steak and meatloaf. Serving meatloaf in a 5-star Michelin restaurant (i.e., giving it a superficial Apple-Pay-like experience) does not make it steak.

I don't feel like getting into an argument about whether banks behind credit cards are earning their money or not. What I do notice is that their particular steak seems to rule the world. I'm yet to go into any city in any town and find a "meatloaf" company's name on the biggest building in that town. I'm yet to hear any public outrage at the bonuses the "meatloaf" company executives and middle managers get. I'm yet to see the U.S. government quickly rally Republicans & Democrats TOGETHER to bail out a "meatloaf" industry to save them from collapse and then later that same year having those "meatloaf" managers paying themselves the biggest bonuses in history. Etc.

We all know this. If we can tag cable companies as "greedy" leech middlemen between us and shows/movies without seeing any "considerable non-material services that cable companies offer to their subscribers", it should be at least as easy to see the big banks the same way.

 

[0970373]

What's funny about this is in the statement released confirming the app it was said to the affect of that most of the email address obtained were dummy accounts used for testing and that the CurrentC system itself was not affected. Seriously??? Was this system developed by 5th graders? Does this not open their eyes up to seeing that the system security is not what they think it is???

I definitely think this was more of an exercise to prove a point rather than trying to steal actual information. MCX, I think, is seriously underestimating the tech-savvy community.

Apple & Google are in this for the long game. This is not going to go well for MCX or its retailers. I do think that the retailers are looking for a way out w/o losing too much of their investment in the MCX system. Apple & Google would do well to help them find a way out or offer incentive to leave that way behind.

 

[Rogifan]

EXACTLY, the only way I see consumers picking MCX over a credit card is if they follow the gas station model of charging slightly more for credit cards purchases (or giving a discount to MCX purchases). If not, I don't think consumers will trade "convenience" over credit card rewards.

It would need to be more than slightly more. I'm not giving a retailer my debit card. Are their facts to back up the meme that retailers are being gouged by credit card companies and we're all paying higher prices for goods as a result? I know it's PC to hate big "evil" multinational corporations. But let's not forget the biggest supporter of MCX and CurrentC is Walmart. Can't get any bigger than that.

 

[ee4life]

why do banks need a lot of personal information on their customers? starting from scratch, you'd give out more personal info to use apple pay than you would to sign up for CurrentC.

[edit] similar sentiments as ctdonath's earlier itt..
https://forums.macrumors.com/showthread.php?p=20245603#post20245603

A creditor generally wants to know how reliable a person is before they offer to lend them money. They also need a way to positively ID a debtor. Banks use the personal information to determine this. If you don't want credit, don't give the information.

So tell me, why does MCX, which does not have the same concerns as the bank, need that information?

 

[Mike MA]

The lessons learned to come in some month or years will be quite predictable.

 

[CB1234]

why do banks need a lot of personal information on their customers? starting from scratch, you'd give out more personal info to use apple pay than you would to sign up for CurrentC.

[edit] similar sentiments as ctdonath's earlier itt..
https://forums.macrumors.com/showthread.php?p=20245603#post20245603

The issue is not about giving out personal information. Your personal information is out there from the day you were born.. It is already out there with various agencies.

The issue is who would you trust your personal information with? Retailers??