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

[B2k1977]

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.

Another "benefit" of CurrentC is how they're packaging up all your PII (Checking Account#, Driver's License# and SSN) needed to steal your identity in a convenient cloud for hackers to steal it from. They've learned nothing from Target and Home Depot. Destined to fail.

It's a fools bet and I will not participate.

 

[kalex]

and argues that the system's cloud-based storage of sensitive customer information offers more security than on-device storage that could be more easily compromised through hacking or theft.

Target, HomeDepot, Michaels - what a great track record of storing sensitive customer information in a more secure cloud based environment vs on-device storage.

Too funny

 

[Romy90210]

Good thing CurrentC won't be storing any of my financial/health/personal data in my phone instead, they will be stored in their "SECURED" cloud.. OUCH!! What could possibly go wrong?????

 

[Bare]

Addressing user privacy, MCX... argues that the system's cloud-based storage of sensitive customer information offers more security than on-device storage that could be more easily compromised through hacking or theft.

ROFL

Not to mention the point about gaining access to MILLIONS of accounts per successful hacking of a cloud server versus gaining access to ONE phone per successful physical phone theft...

How about the fact that CurrentC wants you to enter your bank account and routing numbers, Social Security number and Driver License number? Meanwhile, Passbook doesn't even display my entire credit card numbers. So even if someone were to steal my phone, copy my fingerprint, get into the phone and start digging around (before I have a chance to remotely put it into lost mode and shut the whole thing down), would they get access to my bank account number and personal information like my SSN? Nope.

Boycott MCX. I know I am.

 

[jpmd70]

CVS states: We're in the process of evaluating mobile payment options for our customers and at this time cannot accept ApplePay or other mobile payments that use NFC technology.

I don't get it. You're paying via credit card at a terminal that you can use NFC to transmit your payment or swipe the exact same card at the exact same terminal.
What's the difference?

 

[Menel]

I suspect it's because CurrentC is not actually live yet - you can only use something exclusively when you can actually USE it. If MCX try to enforce the exclusivity clause pre-launch the only people that'd profit would be the lawyers



Oh yeah - I'm in the UK and pay with my contactless ANEX & VISA credit cards all the time



When I worked in Belgium in 2007 they were using a contactless payment system called Mister Cash/Bancontact - SEVEN YEARS PEOPLE

We did in states also, but then card companies started yanking it because having a ready to read RF of acct numbers is far from ideal.

Cellphones are on demand activated only at oayment station, and using tokens is totally different.

 

[dontwalkhand]

We did in states also, but then card companies started yanking it because having a ready to read RF of acct numbers is far from ideal.

Cellphones are on demand activated only at oayment station, and using tokens is totally different.

You've must have typed this on an iPhone . It kept autocorrecting me from "payment" to "oayner"....Come on Apple, at least fix THIS.

 

[tigres]

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).

The business, or clearing house model will be here for a long time to come. The fee is the fee, period.

Safety is now paramount, and that is the key.

 

[gnasher729]

$500,00 per week,
$1 million over 2 weeks
$26 million over 52 weeks.

I'm guessing your number is a bit high.

(Edit: I see I was beaten by a long way to the post.)

Correct. However, currently the number of phone users who could use NFC is still quite small. In a years time, it will be an awful lot bigger. In three years time, at least half the US population will have a phone that can do NFC payments (including Android with Google Wallet, and in three years time there will be people with second and third hand iPhone 6. )

 

[glxyjones]

Sorry - are you trying to educate me on what NFC is? What is your point?



You mean like how Target's own store card offers 5% off all purchases (and free delivery via web orders). I think that's one of the core objectives/incentives that the retailers are going to leverage. You might not get CC points - but that's not going to bother those that use store cards like Macys, Bloomingdales, Target, etc that have their own rewards/loyalty programs.

And if all the retailers do that, it will be GREAT for the consumers, but most stores don't offer the 5% off Target does. They very well could start offering discounts but if they don't, I don't see MCX being chosen over credit cards by the majority of consumers who use credit cards for the points (and security).

 

[HobeSoundDarryl]

I understand why they are fighting ApplePay by turning off NFC. I just don't think they understand their shiny new MCX/CurrentC app will require Apple and Google approval, the very companies they are trying to screw over by turning off NFC. This is going to get very interesting.

I don't think they are trying to screw over Apple or Google. I think they are trying to escape the burden of enriching big banks with every single CC transaction they process in their stores. Apple Pay and Google Wallets are just layers above that. This is a battle below Apple and Google. A primary goal appears to be to reduce the amount of money that flows to the big banks with every CC transaction.

"We" make it an Apple rally only because there is such a thing as Apple Pay. Step back a few months ad "we" would not give a hoot about this effort OR, with Apple seemingly uninvolved, we might be able to look at it objectively and see it as small, tight-margined retailer vs. big, deep-pocketed banks. I wonder which side "we" would take if there was no Apple Pay?

 

[B2k1977]

"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.

I think retailers (particularly walmart) will sign their own death warrants and cut acceptance of credit and it'll be this MCX BS or cash only. That will bankrupt most of these companies. Hell I don't buy anything from Best Buy. Ever. I only go there to look at something in person, touch it, etc. Then I pull out my phone and order it on amazon for cheaper right there in the store, then I go home. If I can't pull my plastic out and use it, I'm not shopping there.

 

[ctdonath]

Importantly, if a merchant decides to stop working with MCX, there are no fines.

But said merchant doesn't get their half million entry-fee dollars back.

 

[gnasher729]

So, I just received a message 10 minutes ago that CurrentC was hacked and leaked email addresses of their users...

If this was a joke, then it would be a good joke. It's not. Or at least, it's reported by BusinessInsider at http://www.businessinsider.com/currentc-hacked-2014-10

So your post wasn't a joke. CurrentC is. Except they are not a good joke.

Good thing CurrentC won't be storing any of my financial/health/personal data in my phone instead, they will be stored in their "SECURED" cloud.. OUCH!! What could possibly go wrong?????

 

[J. Jizzle]

I guess what it boils down to is the customer. If they want to use CurrentC then they have to be aware that there is a very high risk in putting their DL#, SSN # & bank account # in the cloud. The app will probably have a warning of "Use at your own risk" or something & posted at the register, giving the stores who accept CurrentC no liability if your information or identity is stolen, which is BS if you ask me

 

[tjl3]

If this was a joke, then it would be a good joke. It's not. Or at least, it's reported by BusinessInsider at http://www.businessinsider.com/currentc-hacked-2014-10

So your post wasn't a joke. CurrentC is. Except they are not a good joke.

Yup, I got that very email, too lazy to upload that screenshot.

 

[DaveN]

Simple solution

Background: The companies in MCX are sick and tired of credit card fees but their replacement payment system is hideous. In addition they want customers to allow themselves to be tracked. Apple has an elegant system which they are sharing for a minuscule percentage of the transaction (a fraction what credit card companies are charging the stores and that fraction is from the credit card companies' take).

Solution:

1. MCX creates their own credit card system and spins it off as a separate entity. The credit cards can be used at any place that accepts MCX payments. The majority of the fees generated will be returned to MCX members so their cost is virtually nothing. Being a credit card, the customer is still protected under credit laws for account breaches. Starting up a credit card company can't be too hard as Sears did it with Discover.

2. MCX includes an option in their agreement that allows purchases to be tracked in return for a small rebate similar to what other credit cards give. Users can opt in to be tracked in return for rebates and loyalty coupons or they can remain untracked.

3. MCX adopts Apple Pay with Apple getting their standard cut which is far less than what MCX members lose to Visa and Mastarcard.

The incentive for users to switch to or add an MCX charge (or even debit) card would be a higher rewards option. Initially an MCX card would only be accepted at MCX member stores but others may adopt it. That wouldn't be a problem for Apple Pay users as they can load multiple cards into Apple Pay so if one card isn't accepted, they can use a different card.

Problem solved. MCX needs to send a one time fee of ONE BILLION DOLLARS for my solution.

 

[dontwalkhand]

You can pay with your iPhone in Best Buy, you just have to have your Amazon app open while you're there.

Isn't Best Buy just a showroom for Amazon anyways?

 

[GuitarDTO]

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.

Yep, this is why places like Target are able to offer you their "Red Card" and give you a 5% discount on every purchase. That data is worth more than the 5%. These retailers are in an extremely "Rock in hard place" predicament though. Consumers want the guise of privacy. They don't want to be tracked, and increasingly so I think they are even willing to sacrifice potential higher prices for that privilege. I have no issue supporting retailers who support Apple Pay and ignoring the rest. Consumers will ultimately speak the final answer on this skirmish. MCX will NOT take off, at all. The only question is who will be the first big retailer to say to heck with it and change their strategy and embrace a system in which they will not guarantee being able to track their users data.

I see this playing out as all retailers will allow Apple Pay, but most will offer their own payment store cards such as Target Red card that won't work with Apple pay, but will offer financial incentive to use. IE, will the 5% discount be worth it to use the Target card instead of paying through Apple pay.

 

[Buran]

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.

Seems so many are missing why customers don't care. They care about THEIR privacy and THEIR convenience and THEIR security and THEIR accounts. I don't care whether some store thinks it can make money off using this useless system. My credit cards are a buffer against fraud and I receive cash back from one of them.

Apple Pay's tokenisation also gives me a pretty dang powerful buffer against when the retailer fails to protect MY information the way it promised it would and does not properly secure its systems and says "Oh, sure, criminal from Russia! Have a few hundred million card numbers, go on a clone spree, clone peoples' cards, and make them waste time getting new cards and moving all their payments to the new card and dealing with other fallout from your actions!" Even retailers that HAVE already been hacked don't seem to get it! Why would I want to shop at a retailer that's been hacked but still goes out of its way to not only disable two secure, tokenised NFC systems (Apple Pay and Google Wallet) but push a system that is not only not available yet but demands access to bank accounts AND user SSNs? That is a recipe for identity theft disaster.

Their failure to plan accordingly does not constitute an emergency on my part, and I can and do take my business elsewhere, complain about their failure to accommodate my needs in public places (including this one and others), write (politely) to them to tell them why they lost my business until they get their heads out of the proverbial sand, and to raise awareness of how shortsighted and foolish they are.

The customer may not always be right, but in this case, they are very much right. The stores are shooting themselves in the foot. Credit card fees are a modern cost of doing business and the sooner they realise that the better for their own health theyl'l be.

 

[0970373]

Aaaaaaand HACKED.

http://www.businessinsider.com/currentc-hacked-2014-10

 

[UnfetteredMind]

And again - ultimately - it's not about removing all CC transactions or NFC capabilities. In fact, it's also possible that CurrentC might eventually USE NFC. We don't know until it rolls out.

If they did start using NFC, then Pay would work (along with Google Wallet and similar systems), lol

 

[doelcm82]

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.

.........

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).

My main concern is being able to pay conveniently without exposing my account numbers to either the merchant or to thieves who try to hack or spoof the merchant.

I work for a specialty retailer with hundreds of locations nationwide. Since I work in IT, I know how vulnerable we are. On the other hand, though we accept credit cards, we never store credit card account numbers in our central servers. When you swipe the card in one of our stores, the device (the PIN Pad) creates a token similar to what Apple Pay does, and that is what we store. So long as that PIN pad is working correctly, your credit card data is safe with us, because we don't have it. We just have tokens that can't be used for other purposes. I expect many large retailers do the same thing.

A hacker could steal one of our PIN pads and alter it so that it reads the stripe on your credit card and stores or transmits the credit card number and expiration date. A tiny camera like the one inside your smart phone could take a picture of the front and back of the card. A camera could watch you sign on the PIN Pad or see you enter your PIN. An infrared camera could guess your PIN by reading the heat left on the number keys. And we do store a picture of your signature, so that could be hacked.

Apple Pay with an iPhone shuts down these opportunities for collecting accounts of multiple customers. To a slightly lesser extent, so does Google Wallet.

I'm not signing up for CurrentC, as I don't want to give them access to my bank account. I also think that scanning QR codes is an awkward solution. Beyond that, I don't care about CurrentC. I care about Apple Pay. And I'm not shopping at CVS any more because they are boycotting Apple Pay.

 

[B2k1977]

Nice Spin, but the reality is that there is a Fine for leaving. Each company put in $250k-$500k into the consortium and if they leave they will not get their money back. This in essence is a fine for bailing. That means most will probably wait to see if CurrentC gets any traction before writing off the investment.

Anyone with half a brain should be able to look at the user experience of both systems, see the differences and clearly see that this MCX thing is not the way to go. But we do live in a world with a lot of stupid in it so who knows.

 

[squirrellydw]

CurrentC is a joke and both Apple and Google can kill it. Since CurrentC requires an App all Apple and Google need to do is block the App from the App Stores. Problem solved and Apple and Google win. Apple will just say it duplicates what the iPhone already does.