Supermarket Chain Publix Says It's Rolling Out Apple Pay Support All Stores [Update: No]

[zorinlynx]

Looks like they deleted both tweets. Hopefully they were getting enough crap from people that they will rethink this. For the premium prices Publix charges they should make their checkout as convenient as possible for their customers.

It's very telling how many people were blissfully happy when they announced they were going to take Apple Pay, then those people got immediately pissed off when they retracted it.

A lot of people want Apple Pay/NFC. Almost no one wants to have to use a Publix app.

The other thing is, Apple Pay isn't a payment method on its own. The payment method is still your credit or debit card and Apple Pay is just a way of using it. Many cards are being issued now with NFC built in; the same system that accepts those NFC payments is what Apple Pay uses. Apple Pay is equivalent to a tap, chip or swipe in the end. It's frustrating that companies are so afraid of it; it doesn't cost them anymore and it's actually more secure.

 

[tmiw]

It's frustrating that companies are so afraid of it; it doesn't cost them anymore and it's actually more secure.

They're not afraid of Apple Pay per se. It's more related to contactless payment in general reducing the usage of cash (which is still the majority of small purchases in the US), which in itself would increase what they're paying for card processing. Not to mention that they're not all that pleased about card use for larger purchases, either.

 

[blasto2236]

7-11 has a great implementation also. Their reward app lets me put an entry for them in my Apple Wallet. So when I get a drink I get them to scan the barcode on my watch and then pay with my watch. I earn rewards and they track what I'm buying without the need for any "7-11 pay" nonsense.

The problem with 7-Eleven is they take Apple Pay, but not Apple Pay Cash. It's a Discover contactless debit card and 7-Eleven doesn't accept it at any of their locations. It can be a little more hit or miss at smaller locations like franchised gas stations, but 7-Eleven is one of the more high profile chains that just doesn't take Apple Pay Cash. Makes for a pretty frustrating experience if you have a balance you can't spend. Get on board, 7-Eleven!

 

[ralphdaily]

The Starbucks app is well done.

 

[zorinlynx]

They're not afraid of Apple Pay per se. It's more related to contactless payment in general reducing the usage of cash (which is still the majority of small purchases in the US), which in itself would increase what they're paying for card processing. Not to mention that they're not all that pleased about card use for larger purchases, either.

The thing is, they're still going to have to pay for card processing. If I use their app, I'm going to put in my credit card as form of payment. Either they pay the processing fee in the store, or they pay it at corporate when I add money to their app. It's all the same in the end.

Maybe they get a discount if you add a large amount to your "Publix" account because it's one transaction instead of several, but who's going to do that? Each grocery trip can be hundreds of dollars. It's a large enough transaction that they can't really save this way like, for example, Starbucks does.

 

[tmiw]

The thing is, they're still going to have to pay for card processing. If I use their app, I'm going to put in my credit card as form of payment. Either they pay the processing fee in the store, or they pay it at corporate when I add money to their app. It's all the same in the end.

Maybe they get a discount if you add a large amount to your "Publix" account because it's one transaction instead of several, but who's going to do that? Each grocery trip can be hundreds of dollars. It's a large enough transaction that they can't really save this way like, for example, Starbucks does.

Think longer term. They have to accept cards in the app now because people aren't just going to immediately give out their bank account info, but over time, they'll be able to start providing incentives for people to use ACH (or some other less expensive form of payment) instead. Given enough of an incentive, a significant portion of app users will switch over--much like how REDcard is pretty successful at Target.

 

[zorinlynx]

Think longer term. They have to accept cards in the app now because people aren't just going to immediately give out their bank account info, but over time, they'll be able to start providing incentives for people to use ACH (or some other less expensive form of payment) instead. Given enough of an incentive, a significant portion of app users will switch over--much like how REDcard is pretty successful at Target.

It will be a cold day in hell before I start giving out my bank account information to every place I shop. You're basically throwing away all the fraud protection, payment grace periods and so on that cards provide.

EDIT: Also, Redcard is a credit card. You can pay it off every month just like any other card. I'm okay with that as it still has fraud protection and you're pushing the payment to them rather than having it pulled from your account.

 

[tmiw]

It will be a cold day in hell before I start giving out my bank account information to every place I shop. You're basically throwing away all the fraud protection, payment grace periods and so on that cards provide.

EDIT: Also, Redcard is a credit card. You can pay it off every month just like any other card. I'm okay with that as it still has fraud protection and you're pushing the payment to them rather than having it pulled from your account.

There is a debit REDcard too that in effect does an ACH transfer the evening after using it at Target.

 

[BuffaloTF]

Update: No

Another reason Wegmans is the best grocery store in the US.

I mean... they could probably go cash-only/exact change-only and still hold that title... ;-)

 

[zorinlynx]

The Starbucks app is well done.

It's funny, even though the Starbucks app is pretty good, ever since they've started accepting Apple Pay I've just been using that. It's just as fast and convenient and I don't have to keep opening the app whenever I buy coffee and "reloading" it when funds get low.

 

[JRobinsonJr]

I went to Aldi once and they wanted to nickel and dime me for plastic grocery bags.
[doublepost=1559318132][/doublepost]
Receipt management would be the one feature that would get me to use Apple Pay.

Receipt Management would be awesome... but I suspect it would have to be baked into both the POS *and* the Terminal for it to work. Simply adding this as a ApplePay feature won’t work.

 

[Böhme417]

It's funny, even though the Starbucks app is pretty good, ever since they've started accepting Apple Pay I've just been using that. It's just as fast and convenient and I don't have to keep opening the app whenever I buy coffee and "reloading" it when funds get low.

Free coffee doesn't persuade you?

 

[bommai]

We stopped going to Publix once Aldi came to town. Quality is similar for food and prices are much lower. Publix is a great supermarket but or grocery bill would be 25-50% higher if we exclusively shopped there. Apple Pay at Aldi works well.

The regular produce price in Publix is more expensive than the organic produce price in Aldi. Aldi is quick and I love Apple Pay. I don’t go to Publix much anymore even though they are closer to me than Aldi.
[doublepost=1559332962][/doublepost]

I went to Aldi once and they wanted to nickel and dime me for plastic grocery bags.
[doublepost=1559318132][/doublepost]
Receipt management would be the one feature that would get me to use Apple Pay.

Bring your own bags. Plastic bags are polluting and Aldi is just aware of that.

 

[MrJeffreyGee]

Let your voice be heard... Write a Kroger's app review! I already did. Feel free to copy N paste over to the Walmart app as well.

 

[glowplug]

Publix is just being stupid. Otherwise they are a fine store.

Publix is a Republican PAC disguised as a grocery store: https://www.opensecrets.org/orgs/summary.php?id=D000028488

 

[minivini]

If Publix is really holding out and blocking acceptance of Apple and Google Pay NFC options? Then fine. Take the family 'shopping' one day at a busy market... load up two carts (big family, right?) and dump it all at the check out counter(s). Make sure to get lots of Ice Cream for that gathering later!
After it is all counted and bagged... hold out your phone up to the Terminal Pad, "Hey... why isn't this working?? Come on!" As the cashier sheepishly explains that the terminals are only for Credit Cards.... throw up your hands and sigh, "Well all I have are these NFC options as they work everywhere I go! Come on, family.....let's go to Aldi's across the street." The dejected group all sigh together and walk out of the store... leaving the piles of picnic groceries behind. >

Because being an a@$hole to the clerk and local staff will definitely help.

 

[truthertech]

My theory is that the holdouts are the same ones that aren't fans of the whole card interchange system in the first place. Not that they'd necessarily prefer that people use cash instead, mind you, just that they'd at minimum prefer to pay much less than the ~3% per transaction the highest tier cards command (and ideally closer to 0%).

Anyway, charge a few tens of bpp less for NFC transactions compared to swiped/inserted ones and I bet many of those holdouts will fall over themselves to promote its use.

Just so folks don't get confused, the merchant doesn't have to pay anything to use Apple Pay; it's entirely borne by the card issuers, and only .015% (or 15 cents on every hundred dollars for those of us math challenged.) The bigger reason companies like Walmart, Kroger, etc., have resisted letting people use Apple Pay is the lost of control over the consumer information. With Apple Pay, your privacy is protected, unless you choose to use a loyalty card, etc., and the store doesn't get any of your personal information.

 

[emcampbe]

What I don’t understand- here in Germany, I think not a single store “supports Apple Pay”- yet you can use it everywhere where there’s a wireless terminal.
Is it different in the US in stores like this one? Do they somehow block Apple pay or what?

Yes. They do so by either not upgrading to card terminals with NFC capabilities, or in most cases, by just not turning on the NFC functionality, even though it exists. Pretty much the only country in the world where you actually need the physical card to pay at any given store.

Then there are other retailers like
Wal Mart, Kroger etc. who set up there own ____ Pay system using QR codes that you scan on checkout, which also requires you to open up their app, and go to the appropriate place in the app to pay.

But hey, the US pretty much has physical cards that are chip and signature, since they don’t want to incur the costs of Chip and PIN, as per the standard everywhere else in the world.

 

[tmiw]

Just so folks don't get confused, the merchant doesn't have to pay anything to use Apple Pay; it's entirely borne by the card issuers, and only .015% (or 15 cents on every hundred dollars for those of us math challenged.) The bigger reason companies like Walmart, Kroger, etc., have resisted letting people use Apple Pay is the lost of control over the consumer information. With Apple Pay, your privacy is protected, unless you choose to use a loyalty card, etc., and the store doesn't get any of your personal information.

I'm sure data collection was partly the reason for some of the holdouts, but many of the remaining ones already have methods of doing such collection (such as use of a store credit card or a loyalty card/barcode that can be swiped or scanned). Plus, CurrentC only supported store cards or ACH when it was trying to be a thing.

Based on all of the above, it's difficult not to conclude that interchange costs are playing at least some part in their decision not to accept contactless payment.

(BTW, this claims that there is some downward impact on interchange at retailers that have adopted their own apps, either through use of ACH or by effectively batching what would have been multiple transactions together.)
[doublepost=1559449505][/doublepost]

Yes. They do so by either not upgrading to card terminals with NFC capabilities, or in most cases, by just not turning on the NFC functionality, even though it exists. Pretty much the only country in the world where you actually need the physical card to pay at any given store.

Eh, there are other countries that don't really do contactless. For instance, last time I went to Mexico (a year ago), customers basically weren't allowed to interact with the terminal unless a PIN was required and were expected to hand their cards to cashiers. In addition, it looked like contactless wasn't enabled on a fair number of those terminals anyway. Of course, YMMV, and it could very well have improved since then.

Also, the US is definitely nowhere close to, say, Europe in adoption. However, in major cities, you can choose to mostly use contactless by going to competitors that accept it. That wasn't the case a couple of years ago.

But hey, the US pretty much has physical cards that are chip and signature, since they don’t want to incur the costs of Chip and PIN, as per the standard everywhere else in the world.

IMO, this decision basically guaranteed that certain categories of merchants (such as sit-down restaurants) won't bother with contactless any time soon. I also have a fair number of other complaints about how the EMV migration has gone, but that would probably be a thread on its own.

 

[truthertech]

not[/I] to conclude that interchange costs are playing at least some part in their decision not to accept contactless payment.

Since cost's are zero, it actually is difficult to make that conclusion. If it helps to clarify, take a look at which banks have held it up. In the US, the ubiquity of competition made it so no banks/credit card issuers could hold out and there are now thousands of financial institutions that have signed on. Moreover, the .015% is more than made up by the near zero fraud costs that the banks have to eat, (remember, the merchants don't absorb the massive fraud that takes place in the US, the banks do.) Contrast the US with other countries where the number of financial institutions is much smaller and there is often a de facto oligopoly, e.g., Australia where the big four fought tooth and nail to give up their tight hold on control of the system. They are now ceding to customer demand and starting to come on board, especially after losing their legal fight to force Apple to give them access to the system offer their own "in house" program.

 

[tmiw]

Since cost's are zero, it actually is difficult to make that conclusion. If it helps to clarify, take a look at which banks have held it up. In the US, the ubiquity of competition made it so no banks/credit card issuers could hold out and there are now thousands of financial institutions that have signed on. Moreover, the .015% is more than made up by the near zero fraud costs that the banks have to eat, (remember, the merchants don't absorb the massive fraud that takes place in the US, the banks do.) Contrast the US with other countries where the number of financial institutions is much smaller and there is often a de facto oligopoly, e.g., Australia where the big four fought tooth and nail to give up their tight hold on control of the system. They are now ceding to customer demand and starting to come on board, especially after losing their legal fight to force Apple to give them access to the system offer their own "in house" program.

Banks in the US being okay with giving Apple a 0.15% cut is different than merchants in the US being okay with giving an up to 3% cut to the card networks. First, the majority of purchases under $10 are still done in cash (and a significant plurality under $25 are as well). Contactless payment has the potential for transitioning a significant portion of that to cards, as has occurred in other markets. This means more card processing costs for merchants, which already aren't fans of paying them in the first place.

(Note that I say "contactless payment" here, not Apple Pay. Disabling contactless disables all NFC based payment methods, whether smartphone/watch based or through contactless cards. There is no sanctioned way to only allow the latter while disabling, say, only Apple Pay. Also, contactless cards don't provide any way to identify individual cardholders either as the cardholder's name isn't transmitted--well, unless you insert your card at that retailer at some point, anyway, since the card number is the same as what's on the front of the card.)

In addition, contactless tends to operate over the "credit" networks (Visa/MC), even when a debit card's used. For larger banks, the interchange for both Visa/MC and the domestic "debit" networks (STAR, PULSE, etc.) is capped to the same 0.05% per the Durbin Amendment. However, debit cards from smaller banks do not have such a cap, so contactless transactions with those could potentially cost merchants significantly more than if customers had inserted and entered a PIN. Oh, and unlike in some other countries, the US doesn't have a contactless limit, so it's very possible that people can tap cards for extremely large charges (whereas at least insertion could be required elsewhere to mitigate the additional card processing costs).

Thus, disabling contactless provides the interchange-sensitive merchant with several benefits:

1. Smaller transactions will likely still be done in cash at similar levels as now, and if card use for those does increase, it may very well be at a slower rate.
2. Even if a card is used, it'll still allow merchant steering of customers to less expensive networks (e.g. showing a PIN prompt and requiring additional customer input to run "as credit" instead for debit cards).
3. Allows adoption of a separate payment app by customers, as that's basically their only option other than cards or cash. Such usage of the app may also help in lowering interchange, as mentioned in the article I linked previously.

However, this assumes that contactless usage remains low in the US and that there isn't much of a consequence (if any) for merchants that do disable it. If usage and growth of contactless cards ends up being remotely close to what's happened elsewhere (where some have gone from zero to 50% penetration within two years), this may end up being a poor bet in the long run.

 

[gnasher729]

What I don’t understand- here in Germany, I think not a single store “supports Apple Pay”- yet you can use it everywhere where there’s a wireless terminal.
Is it different in the US in stores like this one? Do they somehow block Apple pay or what?

Any terminal that supports contactless cards automatically supports Apple Pay, up to the same limit as contactless (in the UK £30 per payment and £100 per day). So years ago Americans could use Apple Pay in the UK. Your iPhone or Apple Watch just pretends to be a contactless card. I suppose Android works the same.

Better terminals actively support Apple Pay, and the £30 limit goes away. But you are right, practically all terminals in Europe support Apple Pay automatically, it's just that your bank must also support it. AND I remember there have been cases where companies actually _blocked_ Apple Pay. Which is difficult, costs money, upsets the customers, and is a lose-lose situation.

 

[Hookemfins]

Not to sound like a shill, but I seriously don’t understand why anyone would want to put themselves through the chaos that is grocery shopping, when for a few bucks more you can get it delivered.

Simply because I want to make sure I get the absolute latest date on bread. I like to choose my own fruits, meats and veggies. It is the little personal things that make the difference not saving a few bucks.

 

[truthertech]

Banks in the US being okay with giving Apple a 0.15% cut is different than merchants in the US being okay with giving an up to 3% cut to the card networks. First, the majority of purchases under $10 are still done in cash (and a significant plurality under $25 are as well). Contactless payment has the potential for transitioning a significant portion of that to cards, as has occurred in other markets. This means more card processing costs for merchants, which already aren't fans of paying them in the first place.

(Note that I say "contactless payment" here, not Apple Pay. Disabling contactless disables all NFC based payment methods, whether smartphone/watch based or through contactless cards. There is no sanctioned way to only allow the latter while disabling, say, only Apple Pay. Also, contactless cards don't provide any way to identify individual cardholders either as the cardholder's name isn't transmitted--well, unless you insert your card at that retailer at some point, anyway, since the card number is the same as what's on the front of the card.)

In addition, contactless tends to operate over the "credit" networks (Visa/MC), even when a debit card's used. For larger banks, the interchange for both Visa/MC and the domestic "debit" networks (STAR, PULSE, etc.) is capped to the same 0.05% per the Durbin Amendment. However, debit cards from smaller banks do not have such a cap, so contactless transactions with those could potentially cost merchants significantly more than if customers had inserted and entered a PIN. Oh, and unlike in some other countries, the US doesn't have a contactless limit, so it's very possible that people can tap cards for extremely large charges (whereas at least insertion could be required elsewhere to mitigate the additional card processing costs).

Thus, disabling contactless provides the interchange-sensitive merchant with several benefits:

1. Smaller transactions will likely still be done in cash at similar levels as now, and if card use for those does increase, it may very well be at a slower rate.
2. Even if a card is used, it'll still allow merchant steering of customers to less expensive networks (e.g. showing a PIN prompt and requiring additional customer input to run "as credit" instead for debit cards).
3. Allows adoption of a separate payment app by customers, as that's basically their only option other than cards or cash. Such usage of the app may also help in lowering interchange, as mentioned in the article I linked previously.

However, this assumes that contactless usage remains low in the US and that there isn't much of a consequence (if any) for merchants that do disable it. If usage and growth of contactless cards ends up being remotely close to what's happened elsewhere (where some have gone from zero to 50% penetration within two years), this may end up being a poor bet in the long run.

Interesting survey, thanks for providing it. However, your underlying theory that merchants are resisting contactless payments as a means of fending off card payments in general is not correct. It was undoubtedly true years ago that some merchants resisted card payments simply due to processing fees; however, that has long ceased to be the case for the vast majority simply due to consumer demand. Most merchants realize that they couldn't survive by demanding consumers pay in cash/check. You're envisioning a world that doesn't largely exist anymore.

What's fascinating is that many, if not most, merchants now prefer card payment over cash because there are significant costs to handling cash. Indeed, the movement is away from accepting cash as merchants realize that a cash transaction is significantly slower, employee theft/mistake is much greater, it allows for fraud, both in terms of counterfeit money and bad checks (a problem so huge many merchants refuse to accept them), deprives them of customer data, has significant processing costs on the back end, and eliminates the potential for customer self-service options.

To give a couple of examples. Grocery stores used to universally refuse to accept credit cards due to the low mark ups they were dealing with. However, they came to realize that consumer demand and the need to speed up lines and in order to effectively install customer self-service, card payment was essential. That's why Kroger, the largest grocery chain in the US, is adopting contactless payments, but refusing, for now, to accept Apple Pay as they desperately try to get consumers to adopt Kroger Pay. Ditto, with Walmart, Home Depot, etc., they don't discourage card payments as you suggest, but they are going to make a final ditch effort to get you to use their systems before they give up and accept Apple Pay.

One final note, we can't ignore the implementation costs for large merchants to accept Apple Pay and other contactless payments. It cost Costco millions of dollars to switch to NFC capable readers, and until they were convinced that enough consumers had started using their phones and watches for payments, there was no impetus to rush out new readers. They have now done so.

 

[fh-ace]

What I don’t understand- here in Germany, I think not a single store “supports Apple Pay”- yet you can use it everywhere where there’s a wireless terminal.
Is it different in the US in stores like this one? Do they somehow block Apple pay or what?

The store management turns off the option in their master pay terminal settings. Support is in almost every system, but the store have the ability to determine what they do and don’t support. Really stupid on Publix management support.