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

[ArtOfWarfare]

I expect they'll be forced by the member merchants to remove the exclusivity term, or else get dumped entirely.

 

[Apple...]

It's all about greed!

 

[saintforlife]

It's a skirmish that is making everybody squirmish!

 

[QuiteSure]

Then why wait?

MCX members should immediately adopt Apple Pay if there is no economic/legal disincentive for their doing so. Then customers will continue shopping at their stores, getting used to making payments with their smartphones. When CurrentC is ready to debut, customers will already be primed to take out their phones and make a payment. If CurrentC can compete by lowering prices and bundling loyalty cards and other discounts, then let it; the false competition by freezing out another method will engender only continued bad will amongst consumers.

 

[seamer]

Did Apple really say squirmish or did macrumors mean "skirmish"?

 

[wesley96]

What's not entirely clear about this whole "exclusivity" thing is, is this supposed to be limited to "mobile" payments? If not, they'd have to stop accepting credit cards. Not accepting cash is illegal, so that's out of the question.

If so, then turning the NFC terminal off seems to be a ham-fisted way of going about it. Paywave / Paypass use NFC but through existing credit cards, not "mobile". Would this break contracts with the payment processors or the credit card companies, I wonder?

 

[richardsonrs]

What's not entirely clear about this whole "exclusivity" thing is, is this supposed to be limited to "mobile" payments? If not, they'd have to stop accepting credit cards. Not accepting cash is illegal, so that's out of the question.

If so, then turning the NFC terminal off seems to be a ham-fisted way of going about it. Paywave / Paypass use NFC but through existing credit cards, not "mobile". Would this break contracts with the payment processors or the credit card companies, I wonder?

Not accepting cash is not illegal, just as an FYI.

 

[Ttrostel]

Did you all see where the FTC was investigating MCX for anti-competitive practices? Maybe CVS and Rite-Aid will be able to turn NFC back on without problems.

http://www.ftc.gov/sites/default/files/attachments/us-submissions-oecd-and-other-international-competition-fora/1210payment_systems_US.pdf

 

[byke]

The customer is always right, apart from when companies with a vested interest in reducing their overhead costs deem them to be wrong.

 

[DotCom2]

THIS IS IT FOLKS!
Start putting pressure on these retailers to leave the consortium!
Shop with your wallet elsewhere!

 

[windywalks]

This method of payment made little to moderate sense when the original iPhone made its debut. Now it's just taking a giant leap backwards.

 

[The Mercurian]

I believe I speak for many when I say:

HAAAAhaHAhahaHAHAHAAhahahahahahahah

...ahem....

HAHAHAHAHAHAHhahahahhahahah

 

[Elbon]

"retailers...view CurrentC has a key effort to escape from credit card swipe fees"

Here's the thing. I'm probably never going to use CurrentC. It sounds clunky and slow. That means that I'm going to continue to use my credit card, and these retailers are going to continue to pay the swipe fees. So from that perspective, CurrentC is basically a dead end.

 

[Cyrax]

It's rare I see a company push something that is so obviously to their benefit and so obviously inferior for their customers. Usually companies will try to strike a balance.

If there is anything CurrentC reminds me of, it is Divx. Not the codec, but the DVD competitor Circuit City (I think?) came up with way back in the day. The benefits to CC were obvious, but it was so obviously more annoying and inferior to regular DVDs that everybody just wondered who the hell is going to buy into this system. I figure CurrentC will go the same way Divx did.

 

[djeternal2]

Confused....

So if a retailer is a part of the MCX group, and must hold "exclusivity" to the use of mobile payments, then how are retailers like Meijers double dipping???

 

[greatness]

i would find it absolutely hilarious if Apple decides to drop the CurrentC app from the App Store in retaliation.

 

[wesley96]

Not accepting cash is not illegal, just as an FYI.

Ah, you're right, I found this upon a bit of searching. I was misinformed.

http://www.federalreserve.gov/faqs/currency_12772.htm

 

[nepalisherpa]

This payment method sounds so time consuming and confusing. I just do not see this picking up at all.

 

[QuiteSure]

Very interesting

Did you all see where the FTC was investigating MCX for anti-competitive practices? Maybe CVS and Rite-Aid will be able to turn NFC back on without problems.

http://www.ftc.gov/sites/default/fi...l-competition-fora/1210payment_systems_US.pdf

Thanks for the link. Here's probably the most important excerpt:

Joint ventures [such as MXC] that are collaborations between competitors may warrant antitrust scrutiny. ... Whether this is a viable theory would depend on factors such as the freedom that the joint venture’s members have to participate in multiple mobile payment systems​

I'm wondering when or if this story will lose its traction, and whether retailers are going to just hold on tight for the story to fade...

 

[phpmaven]

If that is the case, then what does RiteAid and CVS gain by turning off NFC now or at all?

I see CurrentC as an alternative that some customers will use, but I can't imagine that they will turn away customers that want to pay NFC just to make a point.

Because although there are no fines for completely leaving CurrentC, they signed exclusivity agreements which probably do have fines or penalties for using any other payment option while being part of the consortium.

 

[jclardy]

Seriously if the retailers stay with CurrentC I have to question their management. No consumer in their right mind is going to download their app, enter bank information, and give up using their credit card to pay with their phone at a few stores. Apple Pay works because it can slowly become the norm, uses existing accounts and is actually faster to use than swiping a card.

 

[caesarp]

Seems so many are missing why retailers want a system like this and not Apple Pay. Apple Pay makes thing anonymous. Right now you have retailers like Target that track every purchase you make based on your credit card. This means they can mine the big data and do things like send you coupons based on what you buy. They can see when you visit and see how your visits and purchases increase when they send you coupons or flyers or emails. Here is an older story about how Target's use of big data allowed them to send coupons to a girl that had just become pregnant before even her parents knew. With Apple Pay, your purchase is anonymous. They no longer know who you are so they can't tie that transaction to your profile anymore.

Yes the transaction fee is a hit to them but the above is much bigger. The above has the potential to make them much more than they'll lose in transaction fees.

As a consumer I want to be anonymous. I don't want your corporate greeters to say a mandated hello to me when I walk in; I don't want you to ask me questions at the cash register about your loyalty program; I don't want you to ask me my zip code. I just want to pay and leave.

 

[Jeremy1026]

I don't think most of these companies probably care about the $500,000 investment they will lose, as it is really a drop in the bucket for most. CVS has probably lost that much since they shut off Apple Pay.

The real question they are wrangling with is whether or not they think CurrentC will save them or make them enough money in the long run to justify the lost sales from Apple Pay. I think that's an obvious "no" at this point, but they still probably have to work through the numbers.

I think you'll see the end pretty soon, actually.

CVS has $126.76B in revenue in FY2013. If they lost $500,000 over the course of a week since they shut down their NFC readers, that would mean that they would have done $26B in NFC transactions over the course of a year, or 1/5th of their total annual revenue. Me thinks your number is a bit high.

 

[caesarp]

Because although there are no fines for completely leaving CurrentC, they signed exclusivity agreements which probably do have fines or penalties for using any other payment option while being part of the consortium.

So rite aid and CVS need to sack up and leave the consortium.

 

[DotCom2]

I expect they'll be forced by the members mchants to remove the exclusivity term, or else get dumped entirely.

THIS!
All they have to do is drop the exclusivity and let retailers ACCEPT all forms of payment and let the chips fall where they may.
THE CUSTOMERS WILL DECIDE IN THE END.