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

[flat five]

When you talking of new system being widespread do you mean MCX?? If you do, then I feel it will be a non starter (imo).

MCX system is based on mining data and lining their own pockets instead of the bankers. If it was based on consumer convenience and security, then no doubt they would win...

no, i don't mean MCX.. i mean a new system in which a majority of people will be using their phone/devices at POS instead of cards/cash.. (be it applePay or mcx or whatever)

something is going to be in place five years from now and it probably won't be applePay's current implementation nor currentC's beta software.. we, as consumers, should probably not choose a side in this right now.. instead, we'd be better served if the petition was to get apple and google and the retailers to work together on a solution..
(but i doubt that will happen.. apple/google wants a cut from the banks on billions (trillions?) of transactions.. basically the opposite of what the retailers want-- their cut of transaction fees)

 

[zhenya]

Debit cards as implemented now does have bank fees and has a fundamental flaw vs. using a credit card that even the dumb masses can recognize. When you use your debit card, you often have to punch in a pin. Sharing your card and pin with stranger (retailers) feels much more insecure than just using a credit card. Sure there's some situations where a Debit Card is processed like a credit card (no pin entry) but it's not always easy to tell if that will be the case for any given transaction. Thus, using a CC feels both safer and easier than using a DC.



By that logic, Apple Pay should also be viewed as having little chance of success because "The fact that MOST people choose their credit cards" over Apple Pay. Furthermore, to use Apple Pay, you have to lay out some money to buy an iPhone (and only an iPhone, as Apple Pay won't work with any other phones). If we're going to use a "most people" argument, it will be a very long time before "most people" are choosing Apple Pay over many other alternatives. That doesn't automatically dismiss Apple Pay as a poor alternative.

I agree that as it's spun so far, CurrentC is convoluted but that doesn't mean the final incarnation of it that arrives next year will be that way. The group behind it have been exposed to how easy transactions can be done with Apple Pay. That will set a bar. They'll either aim for that bar or bring something to market that is harder to use. The latter makes little sense for what should be smart people involved in trying to make this happen. So I suspect what comes to market next year (if anything) will be much less convoluted than what we know about it now.

Hand over my PIN or hand over all the personal information needed to steal my identity. Hmm...tough one that. Yes, the PIN is a bar that drives some credit card transactions, but it is VERY low compared to those set by the CurrentC system. Again, it would take very little in incentives to encourage people to use their PIN. Yet almost nobody does that. It tells me that the credit card fees are not the real concern. (Yes debit cards have fees as well, but they are much much lower than credit). CurrentC is bound to have its own cost as well.

ApplePay has a huge chance of success because within a couple of years it will be built in to nearly every iPhone on the market which means that half of the market will have access to it. It works on the same platform as Google's and other systems. It's pro-consumer. This is not an Apple love-fest, they made smart decisions in designing this and CurrentC looks like an 8-track in a digital world.

 

[HobeSoundDarryl]

However, at this current moment in time, if I pay for a product out of my bank account or credit card, I pay the same price. With the credit card I get added security and rewards, so as a consumer, why on earth would I choose the alternative?

I'm a consumer. Sometimes I'll pay cash at stores because I don't want the banks to take the percentage from that store. In other words, I'd rather the store have that slice of profit rather than the banks even if I don't get some fraction of the banks profit on that transaction in the form of some CC benefit.

And who knows? While I've talked to the idea of leaving that slice of the profits with the retailers, maybe the retailers could lower prices a bit because they don't have to make up for the banks transactional fee to the same degree. If so, then our benefit is lower prices on up to everything we buy. I'd gladly trade 10 cents in cash back to save > 10 cents on a purchase.

One more time: this is not about forcing anything on anyone. If one likes to use only CCs, they should be able to do so. If one likes to use only Apple Pay for any purchase, they should be able to do so. It's just an alternative. I extraordinarily doubt that if it can come to market, big stores like Walmart would refuse sales on CCs.

I suspect they are just seeing an opportunity here with Apple Pay really highlighting the potential for a tangible change in how some of their customers buy things. This is an opportunity to potentially replace the almost automatic transactions done with credit cards to other options WHILE consumers are making this shift. Does that mean that all consumers will stop using CCs? No. But if a segment of them who switches to buying with phones, tablets and watches would get into NOT using a CC underneath an app like Apple Pay, the retailers could either make more money or lower prices or both. They could still accommodate every single customer that wants to pay with CCs too, and cash, etc.

 

[samcraig]

Because we're not seeing any evidence, nor are CurrentC giving us any.

Are consumers supposed to imagine benefits for themselves? Can't see that ending well.

Well it hasn't launched yet. What obligation do they have. Apple doesn't release every bit of info before they launch a product. How long does it take to charge the Apple watch battery?

First, if this is about credit card fees, then offering flat discounts basically nullifies the gains.

Second, they have explicitly blocked all competing mobile payment solutions. Do you have to offer something better when you don't have any competition?

Targeted coupons are hardly much of an draw for me. "Hey, come back and buy this stuff we think you'll like!" Barf.

I don't think it's much of a logical leap to assume that no matter what "incentive" they cook up, the customer will end up paying for it somehow. Either that, or we become the product.

Because the benefits are nebulous and defined at the individual retailer level. A few might offer a discount. Others might offer rewards. But we have no idea what it will actually be. Further, these same merchants could be offering incentives today to customers who pay by cash or debit card. The fact that few of them actually do speaks volumes about their intentions. If Apple had designed CurrentC the customer benefit would have been the highlight - something along the lines of 'And we have over 200 retailers on-board TODAY who have committed to a 2% discount for customers who pay with AppleDebit.'

Apple nearly always has the customer in mind when they launch new services like this - from the original iTunes music store, to the launch of the iPhone where Apple wrenched much needed control from the carriers, and so on. Everything we've seen from MCX has been anti-consumer. What are we supposed to think?

First - no it doesn't negate credit card fees.
Second - Ok. So they've blocked them until they've launched their service. it's their store and their decision, no? Apple decides what can and can't be sold via their app store.

I reserve my judgment until launch.

 

[kilcher]

Paypal lets you link your bank information, and doesn't require an SSN to do it unless you are a high-volume merchant.

Why would MCX need it?

I don't know but when I got my Target RedCard I had to provide it and I assume this works in a similar manner - basically linked to your checking account. Maybe the bank needs it (for verification purposes) before they'll allow access.

 

[Rogifan]

With my example and explanation (again) - where do you see that retailers are eliminating the ability to pay with a credit card.

I never said eliminate all credit cards. But I think they're taking away a popular option for very little benefit in the end. I'm not going to pay by debit card/ACH so if they don't offer me the ability to use NFC/Pay I'll shop elsewhere or just use my plastic credit card. People have made a choice to pay on credit. Walmart can't change that.

 

[HobeSoundDarryl]

Apple isn't forcing anyone to use ApplePay.

I've not seen one line where any of the MCX group is saying customers will be forced to use CurrentC. Please point to that if it exists.

 

[Rogifan]

I've said nothing about forcing anyone to do anything. This is just an alternative platform, like the "as is" or Paypal or using Points to buy an airplane ticket. Best I know, this is NOT about destroying CCs so those- like you- that prefer to use CCs will keep right on using them. Apple Pay, Paypal, Google Wallet, etc didn't destroy any other form of payment that existed before it either.

As is so typical here, people seem to see a topic like this in extremes or want to spin it as if it is in extremes. This not an either/or- just another option. I suspect if it makes it to market, we consumers wouldn't even be able to tell that any given merchant supports it unless we want to proactively adopt it as our favored way and then use some custom app to be able to do so. If it makes it, I suspect Apple Pay will just evolve to work with it too, so the very same way someone buys something with Apple Pay now will carry over.

If it brings some alternative payment option (not a CC), then that option would be chosen with Apple Pay for anyone that wants to pay that way. However, if they don't want to go that way, they use their CC or whatever else they typically use in Apple Pay.

I have no issue with CurrentC. My issue is with MCX merchants removing the ability to pay via NFC because they have a beef with credit card/banks. If I can pay with my plastic card, why can't I pay with my phone? We know why. Because Pay is slick, most likely would take off and that's not what the Walmart's of the world want.

 

[flat five]

Paypal lets you link your bank information, and doesn't require an SSN to do it unless you are a high-volume merchant.

Why would MCX need it?

i don't know why they need it.. and really, i don't care if they have it as long as it's secure.

on a side note-- what if applePay required you to sign up using your ssn? would you feel any different or more safe? (assuming apple were giving off the same sense of security as they are with applePay)..

personally, if i could sign up for applePay in a similar way currentC requires (but apple-fied/easier) then make transactions with nfc/touchID-- while at the same time, the CC fees are out of the equation... (in other words-- Apple security/hardware/UI combined with the retailers avoiding transaction fees).. i'd go with that option today.

or-- is your argument really Apple vs MCX and not so much about the services being provided?

 

[Rogifan]

I've not seen one line where any of the MCX group is saying customers will be forced to use CurrentC. Please point to that if it exists.

No, you just won't be allowed to use Pay. Are you Ok with Apple removing the CurrentC app from the AppStore once it goes live?

 

[ee4life]

no, i don't mean MCX.. i mean a new system in which a majority of people will be using their phone/devices at POS instead of cards/cash.. (be it applePay or mcx or whatever)

something is going to be in place five years from now and it probably won't be applePay's current implementation nor currentC's beta software.. we, as consumers, should probably not choose a side in this right now.. instead, we'd be better served if the petition was to get apple and google and the retailers to work together on a solution..
(but i doubt that will happen.. apple/google wants a cut from the banks on billions (trillions?) of transactions.. basically the opposite of what the retailers want-- their cut of transaction fees)

Apple and Google already use the same solution. NFC payment is NFC payment. It's a standard. And better yet: it's already in a lot of retail locations across the country, including many shops that are part of MCX (just waiting to be turned back on).

The dumb decision retailers made was backing the horse that locked them into exclusivity with a delivery date of 3+ years. Surely even those willing to give MCX the benefit of the doubt will agree it would have been smarter to let things play out and join later if it took off.

 

[HobeSoundDarryl]

Are consumers supposed to imagine benefits for themselves?

Are consumers supposed to imagine detriments for themselves? That's all that going on here.

The thing's apparently a year out from coming to market. Consumers know next to nothing about what the final version of this will be. A year before iPhone 6, this crowd was railing hard against screen sizes bigger than 4". Even a few weeks before 6+, this crowd was railing hard against the very idea of a 5.5" iPhone screen. In spite of all that faulting with the concept of bigger iPhones, we see how the reality played out when it came to market.

Use advanced search and look for NFC threads from even as recent as 1 year ago. This same crowd railed hard against NFC with much of the same reasoning flying about this. Go look it up; it's right on this site.

I'll grant you that CurrentC may be a total dog by the time it gets here in final form. But then again, maybe it's an iPhone 6 when >4" screen phones were still viewed as "abominations", "stupid", "99% don't want", "one handed use", "cargo pants pockets" and all that.

The companies that are behind it are big, deep-pocketed companies. They can afford to hire exceptional talent to help put this together. Apple has just shown them how easily a phone-based payment system can be set up so a bar- a very high bar- has been set. They'll either rise to the occasion or not by the time they try to bring this to market.

 

[ee4life]

First - no it doesn't negate credit card fees.

So as a merchant, if I give 5% back to the customer instead of paying a 3% tax-deductible transaction fee on a purchase, I'm coming out ahead?

 

[zhenya]

Are consumers supposed to imagine detriments for themselves? That's all that going on here.

Are you kidding me? People are not reacting to imagined negatives - the reactions to CurrentC are reactions against the system as they have set it up and marketed it. We don't have to imagine the detriments. That's the entire point of this conversation.

 

[DaveN]

So basically what you're saying is most people prefer to pay on credit. Hence why Apple chose to work with the major credit card companies and banks.

No. I'm saying that the strategy for retailers should be that for those who do pay with credit cards, give them a solution instead of a barrier.

 

[HobeSoundDarryl]

Hand over my PIN or hand over all the personal information needed to steal my identity. Hmm...tough one that. Yes, the PIN is a bar that drives some credit card transactions, but it is VERY low compared to those set by the CurrentC system. Again, it would take very little in incentives to encourage people to use their PIN. Yet almost nobody does that. It tells me that the credit card fees are not the real concern. (Yes debit cards have fees as well, but they are much much lower than credit). CurrentC is bound to have its own cost as well.

I'll speak from my own point of view. I'm quite reluctant to punching in my pin with any retailer. So given the choice of CC vs. DC, I'll use a CC. If a retailer is encouraging me to share my pin, I'm likely to be even more suspicious of them.

The identity theft implication would apply both ways. Since any new system is going to need to deliver consumer confidence, any new system is going to have to address that well. Apple just did. Now competitors have time to try to address it as well as Apple just did. What was the plan before Apple Pay rolled out is likely no longer the plans of competitors. Instead, they'll adapt. Else, why bother?

ApplePay has a huge chance of success because within a couple of years it will be built in to nearly every iPhone on the market which means that half of the market will have access to it.

What market is that? You do know that the vast majority of cell phones sold are not iPhones right? None of them will have Apple Pay. I agree Apple Pay will be a success because Apple is behind it and it is a good system. But the only market that will be able to use it will be iPhone buyers and there's a whole lot more people in the world using cell phones that aren't iPhones.

I have nothing bad to say against Apple Pay. It is a great system. They did a great job addressing many issues in one exceptional model. Competitors have now seen that model and will have to evolve their own plans to better compete. If a CurrentC can't evolve their approach to better compete, they'll give up on it.

But again, I see CurrentC as a layer below Apple Pay, meaning Apple Pay could run atop CurrentC. I see CurrentC as a challenger to the "as is" (mostly CC-driven system that has ruled for many decades). Apple Pay is like iTunes running atop either OS X or Windows. It can run atop the "as is" system (which it does now) and any alternative like CurrentC if Apple chooses to do so.

 

[zhenya]

Use advanced search and look for NFC threads from even as recent as 1 year ago. This same crowd railed hard against NFC with much of the same reasoning flying about this. Go look it up; it's right on this site.

The vast majority of the argument against NFC was that the Android crew wanted to ding Apple for not including it over the last couple of years. The argument was 'show me a reason that it's useful and I'll reconsider.' So yes, I was completely against including NFC unless it was there for a specific, useful reason.

If you want to extend that to CurrentC then yes, show me a reason that it's useful, convenient and safe for me to use. They have a reasonably large body of content out there right now that shows exactly none of that.

 

[djeternal2]

Interesting.....

...seems we have some oddities here:

http://www.mlive.com/business/west-michigan/index.ssf/2014/10/why_meijer_isnt_ditching_apple.html

 

[zhenya]

What market is that? You do know that the vast majority of cell phones sold are not iPhones right? None of them will have Apple pay. I agree Apple Pay will be a success because Apple is behind it and it is a good system. But the only market that will be able to use it will be iPhone buyers and there's a whole lot more people in the world using cell phones that aren't iPhones.

Of course I know that which is why I wrote what I did. The iPhone is still individually the largest proportion of smartphones in the American market (ie. Android has a larger market but it's spread across a large number of manufacturers who don't offer a consistent feature set). Further, and again why I wrote what I did, it doesn't matter if only Apple users can use ApplePay because it's utilizing the same equipment as every other NFC implementation. Retailers have to do nothing!!

 

[flat five]

Apple and Google already use the same solution. NFC payment is NFC payment. It's a standard. And better yet: it's already in a lot of retail locations across the country, including many shops that are part of MCX (just waiting to be turned back on).

The dumb decision retailers made was backing the horse that locked them into exclusivity with a delivery date of 3+ years. Surely even those willing to give MCX the benefit of the doubt will agree it would have been smarter to let things play out and join later if it took off.

NFC is a technology.. MCX is a consortium
they aren't directly comparable.
for instance, MCX could use NFC or similar (and i assume that's what they're scrambling to do right now.. their implementation with the QR code is crap.. and if they didn't realize that before, they surely will now once applePay is out)

fwiw, another problem i have with applePay (or similar) is that a few years from now when we can do individual->individual transactions (i.e.- loan you a twenty spot), the banks (and apple) will get a cut.. basically, anytime money moves, they'll get part of it.. they already get a big chunk from money movements but if applePay becomes standard, they'll reel in the rest.. there's nothing positive about this unless you're a big bank or apple.

 

[HobeSoundDarryl]

I have no issue with CurrentC. My issue is with MCX merchants removing the ability to pay via NFC because they have a beef with credit card/banks. If I can pay with my plastic card, why can't I pay with my phone? We know why. Because Pay is slick, most likely would take off and that's not what the Walmart's of the world want.

OR, now that they've seen the slickness of Apple Pay, they have been inspired to take a crack at trying to alter what underpins Apple Pay (the old bank-enriching CC model). So they are trying to slow down adoption a bit so they have time to try to accomplish their business objectives.

I don't think they removed the ability to pay via NFC because they have a beef with CC/banks. I suspect they just want some time to try to take advantage of this opportunity. It's not an act against Apple; it's likely an act inspired by Apple Pay. Here's a rare chance to make a bigger change than just putting a slicker, more secure interface over an old, somewhat exploitive CC system. So they're trying.

By the way, Walmart sells iPhones. And Walmart LOVES revenue. They aren't turning away your only Apple Pay transactions because they hate Apple's products or your money. There's more at work here than conspiracy against Apple or NFC.

----------

No, you just won't be allowed to use Pay. Are you Ok with Apple removing the CurrentC app from the AppStore once it goes live?

It's Apple's store. They can sell whatever they want.

And please point me to anything that says someone won't be allowed to us Apple Pay on the MCX/CurrentC platform. Just because some retailers have turned off NFC for now doesn't mean that's a permanent thing against Apple Pay. In fact, if I was part of this MCX group, I'd be aggressively working with Apple to try to get them to also make Apple Pay work with the platform. And Apple should be interested because supporting multiple platforms like supporting multiple CCs is just good for Apple Pay (and thus iPhone) adoption.

 

[ee4life]

NFC is a technology.. MCX is a consortium
they aren't directly comparable.
for instance, MCX could use NFC or similar (and i assume that's what they're scrambling to do right now.. their implementation with the QR code is crap.. and if they didn't realize that before, they surely will now once applePay is out)

fwiw, another problem i have with applePay (or similar) is that a few years from now when we can do individual->individual transactions (i.e.- loan you a twenty spot), the banks (and apple) will get a cut.. basically, anytime money moves, they'll get part of it.. they already get a big chunk from money movements but if applePay becomes standard, they'll reel in the rest.. there's nothing positive about this unless you're a big bank or apple.

Ok, NFC is a technology, but it's implementation with regards to payment is a system. You tap to pay, works the same between Apple Pay, Google Wallet, PayPass, etc. CurrentC is a system, you use the QR code shenanigans. And, no, they won't use NFC, at least not in an Apple phone. In my mind they are directly comparable.

 

[flat five]

So as a merchant, if I give 5% back to the customer instead of paying a 3% tax-deductible transaction fee on a purchase, I'm coming out ahead?

actually, you are.

either pay 3% to someone else -or- LOAN 3% to someone and give them 2% (i.e.- pay the same 3% fee to the merchant's own lending setup and give the customer 2% off)

in the fractional reserve system, loaned money generally requires you have 10% of the amount.. the other 90% can be used to make more loans.. and on and on..

the merchants will make more money if they are the ones doing the loaning/collecting interest/etc.. and i assume much more than the 2% customer savings

 

[zhenya]

By the way, Walmart sells iPhones. And Walmart LOVES revenue. They aren't turning away your only Apple Pay transactions because they hate Apple's products or your money. There's more at work here than conspiracy against Apple or NFC.

Oh, I agree. I fully think that MCX was put together by people who aren't particularly tech-saavy, and first and foremost wanted to put together a system that they could sell to retailers. They were astute enough to be concerned about a competitor knocking them over that they required exclusivity, but they were completely tone deaf to the fact that consumers might get wind of it before they had a chance to market it with some third-rate advertising company. They never expected ApplePay and how hilariously out of touch they would end up looking. I'd love to be a fly in the MCX offices this week.

I honestly will be very surprised if CurrentC ever makes it out of its trial run. At best it will be re-branded and released without the exclusivity requirement.

 

[HobeSoundDarryl]

Are you kidding me? People are not reacting to imagined negatives - the reactions to CurrentC are reactions against the system as they have set it up and marketed it. We don't have to imagine the detriments. That's the entire point of this conversation.

The guy I replied to ask if people are supposed to imagine benefits, as if there were none. So I replied back asking if people are supposed to be imagining detriments because that's what they are doing for a product that doesn't actually come to market for a year.

What we actually know about it right now is very little. We've taken that very little and piled on a bunch of negative speculation because we see this as some kind of challenger to Apple Pay (and thus Apple). To me this is very much like when we could find all kinds of faults with bigger-screen phones before Apple went to bigger screen phones. Where's all that endless bashing of bigger-screen phones now?

The thing is coming out NEXT YEAR. We don't know what it is yet. There's been some ideas and there's an app now (and some beta testing). BUT, all that is now being considered against what Apple just rolled out. They'll have to adapt and it will be dumb to roll out a messy, multi-step process vs. Apple Pay's process. It will be weak to come out with tangible variables of weaker security vs. Apple Pay's spin of it's security. And so on.

They've got a year to evolve the concept into something much better. A year before iPhone 6, this crowd was still finding enormous faults with even the idea of bigger-screen iPhones. What a difference a year can make.