Why CurrentC is not all bad

[d.steve]

Like many, I am excited by Apple Pay and the potential to disrupt payment services with customer security in mind. I am also peeved that companies like CVS who are backing CurrentC are now disabling NFC payments.

But what is CurrentC really about?

Techcrunch has the best article I've found so far on really understanding the motivation behind CurrentC: http://techcrunch.com/2014/10/25/currentc/. It is worth reading to understand what is at play here.

Essentially, there are two areas that need disruption:
- security for customers (Apple Pay)
- credit card fees for merchants (CurrentC)

Why should you care about the latter? Briefly, merchants have to pay fees + percentage of sale on each transaction. Say, 2% plus $0.35. If you use an "affinity" (miles/rebate) card, the merchant gets charged even more on the transaction, and the credit card company makes even more out of the deal, kicking some of it back to the consumer to lure the consumer to make more money for the credit card system.

This increases cost to merchants and end prices to customers, while pros include fraud protection, extended warranties, and other consumer benefits perceived to the individual (but weigh against consumers in the aggregate).

CurrentC is essentially an effort to break to merchants' dependence on this system, but may be deemed a success on their end if they can just gain leverage on the credit card companies to reduce the costs. In the end, this potentially is good for the consumer, too, but the pessimist side of me feels that the merchant would keep the profit with no benefit to the consumer!

CurrentC is horribly flawed, especially from the consumer side, but the really unfortunate thing is that neither CurrentC nor Apple Pay is a solution to BOTH problems and in being separate cause them to conflict with each other.

We either need them to join up or we need someone to step in with a disruptive solution to both issues. Or we will just have to wait until CurrentC fails!

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CurrentCis also about merchants being able to mine customer data. However, there are merchant solutions for that that do not conflict with Apple Pay and therefore is left out of original post.

 

[stasha]

Free currentC ads on MR

 

[CoilTap]

Credit card fees aren't a problem. They're a cost of doing business. Card usage drives in consumers who otherwise would not shop at the store and abstracts away the risk of dealing with large volumes of cash directly from the business.

So, while some of the fee is a cost to the merchant, some of it is also beneficial. As the consumer, whatever small margin is added to retail pricing to offset credit card fees is negligible next to the value of benefits from using the card - the fraud protection, extended warranties, cash back, etc.

CurrentC is invasive junk that harvests more personal data than the retailer can get from my credit card and is tied directly to my bank account, giving me almost no fraud protection. CurrentC is the most anti-consumer payment method I've ever seen.

 

[Romy90210]

currentcis also about merchants being able to mine customer data..

good enough of a reason for me to avoind using this service at all cost!!!

 

[scaredpoet]

Essentially, there are two areas that need disruption:
- security for customers (Apple Pay)
- credit card fees for merchants (CurrentC)

That's fine, and I believe CurrentC should get every fair chance to prove its mettle in the marketplace. But it shouldn't be done by forcibly disabling other payment methods.

I have no qualm with CurrentC. I have a problem with retailers going through great lengths and making extra efforts, to disable other payment methods, before CurrentC is even available.

 

[Romy90210]

currentc is invasive junk - tied directly to my bank account, giving me almost no fraud protection..

that right there should keep millions of smart working ppl from giving this service a try

 

[JayLenochiniMac]

Whether they join up or not, I'm not giving anyone my bank account info. I don't even write checks or use my debit card for this reason, especially after I became a victim of identity theft. I'll stick with Apple pay or credit cards.

 

[Charadis]

My concern with CurrentC is that it might not work as smoothly as ApplePay. Google wallet has been available for a while now, but ApplePay allows the user the convenience without having to unlock the phone or open a separate app. Sent from my iPad.

 

[d.steve]

Free currentC ads on MR

You've missed the point. It's not an ad. It's about raising understanding of the issues at play here so people can advocate in a more educated fashion instead out of lack of understanding of motivations.

I'm not a CurrentC proponent - quite the opposite.

 

[CoilTap]

that right there should keep millions of smart working ppl from giving this service a try

Exactly. No one should ever give CurrentC the time of day. It's a dangerous, anti-consumer service that exists only to save merchants a few bucks at great risk to the consumer. I also don't trust the MXC companies, many of which have been hacked, to store my bank account data securely.

 

[dddennis]

The way I see it:

Apple Pay= Good for and convenient for the customer.

CurrentC= Good for the retailer/carrier: Bad for and inconvenient for the customer.

I've tried Google Wallet. Fantastic until the carriers decided to lock it out because they wanted their own systems.

The customer should have the vote on which system THEY want, not what the retailers or carriers want.

 

[wordoflife]

Swipe fees aren't a problem, like Coiltap mentioned. If it were really that big of a problem, they wouldn't be accepting credit cards. CurrentC is terrible for consumers. I'm not giving direct access to my bank account and giving up the benefits and protections that my credit card offers me.

While I'd prefer using a secure (read: ApplePay) way to pay for my items on my phone, I will swipe my card if necessary.

 

[Primejimbo]

Swipe fees aren't a problem, like Coiltap mentioned. If it were really that big of a problem, they wouldn't be accepting credit cards. CurrentC is terrible for consumers. I'm not giving direct access to my bank account and giving up the benefits and protections that my credit card offers me.

While I'd prefer using a secure (read: ApplePay) way to pay for my items on my phone, I will swipe my card if necessary.

And that's how I'll do things. I don't need all these different apps so I can pay someone. Like you, I'll use Apple pay when I can, or swipe if I can't.

 

[tigress666]

Swipe fees aren't a problem, like Coiltap mentioned. If it were really that big of a problem, they wouldn't be accepting credit cards. CurrentC is terrible for consumers. I'm not giving direct access to my bank account and giving up the benefits and protections that my credit card offers me.

While I'd prefer using a secure (read: ApplePay) way to pay for my items on my phone, I will swipe my card if necessary.

Actually, for small businesses swipe fees are a problem. But that has gotten better now that the government told CC's they cannot require merchants to accept CCs even for small purchases (or charge extra for small purchases).

And yes, they could just say cash only but these days that in itself is problematic cause CCs are so prevalent that you lose a lot of business that way.

I mean I can sympathize with the merchants on the fact the fees are so expensive (especially if you are a small business) and yet it is almost required to accept them if you want to actually get business (and CCs know this).

That being said, f* them for trying to push on me a system that gives them access to my bank account and makes things worse for me and is not all that easy to use either (and apparently requires you give them an SSN too, F* that).

They want to get around the merchant fees, then find a system that can actually compete well with CCs.

Just cause I can sympathize with them doesn't mean I'm going to use a system that is worse for me.

 

[d.steve]

That being said, f* them for trying to push on me a system that gives them access to my bank account and makes things worse for me and is not all that easy to use either (and apparently requires you give them an SSN too, F* that).

They want to get around the merchant fees, then find a system that can actually compete well with CCs.

Just cause I can sympathize with them doesn't mean I'm going to use a system that is worse for me.

THIS!

Just realized an analogy. CurrentC is today's DIVX.

 

[Tripzter]

Interesting read from Tech Crunch on MCX and CurrentC. From what was written, CurrentC is bad for consumers, spooky and creepy.

It's a clunky interface. You scan a QR code, then the cashier scans the QR code on your phone. Less secure while your checking account info is stored in a *secure cloud*. Customers are liable for fraud.

It only benefits the merchants since they pay .04 cents per transaction. Merchants pay MCX/CurrentC upfront for use of the technology, and it effectively locks out other mobile payment methods for 3 years.

I refuse to believe banks will support CurrentC, since it bypasses swipe fees, offers no consumer protections, and no privacy for consumers. Who wants to share health info with Walmart?

 

[themyst]

Credit Cards also provide us protection from the vendors, something that won't go over too well on CurrentC. You gave us your money? Too bad. With ApplePay you still have the protection of the issuing bank/creditor.

My personal opinion of CurrentC is, unless they do something like Target does with REDcard and give a flat 5% off everything, there isn't a chance in hell I'd use it.

I bet Target's beef with Apple Pay is, they could easily get REDcard to work with the service, but then they'd have to pay Apple's fee which isn't going to stay flat forever.

I don't find yanking a card out of my wallet all that cumbersome. What I would find cumbersome is pulling a 6+ out of my pocket to scan.

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Interesting read from Tech Crunch on MCX and CurrentC. From what was written, CurrentC is bad for consumers, spooky and creepy.

It's a clunky interface. You scan a QR code, then the cashier scans the QR code on your phone. Less secure while your checking account info is stored in a *secure cloud*. Customers are liable for fraud.

It only benefits the merchants since they pay .04 cents per transaction. Merchants pay MCX/CurrentC upfront for use of the technology, and it effectively locks out other mobile payment methods for 3 years.

I refuse to believe banks will support CurrentC, since it bypasses swipe fees, offers no consumer protections, and no privacy for consumers. Who wants to share health info with Walmart?

Hmmm... this customer buys an abnormally large amount of Doritos and Pepsi at our Walmart... perhaps we could e-mail him a coupon for Pepto Bismol and refer him for some Obamacare. No thanks.

 

[deeddawg]

Hmmm... this customer buys an abnormally large amount of Doritos and Pepsi at our Walmart... perhaps we could e-mail him a coupon for Pepto Bismol and refer him for some Obamacare. No thanks.

Already happens much more than you might want to know...

See How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did

 

[wxman2003]

Interesting read from Tech Crunch on MCX and CurrentC. From what was written, CurrentC is bad for consumers, spooky and creepy.

It's a clunky interface. You scan a QR code, then the cashier scans the QR code on your phone. Less secure while your checking account info is stored in a *secure cloud*. Customers are liable for fraud.

It only benefits the merchants since they pay .04 cents per transaction. Merchants pay MCX/CurrentC upfront for use of the technology, and it effectively locks out other mobile payment methods for 3 years.

I refuse to believe banks will support CurrentC, since it bypasses swipe fees, offers no consumer protections, and no privacy for consumers. Who wants to share health info with Walmart?

Why would anyone want to use this if customer is liable for fraud? I would rather take my chances with swiping my CC over using this. At least the bank will still cover the fraud. The threat of being liable is not worth saving 5% at the store. Plus with these stores being locked into a contract for 3 years, will pretty much end further rollout of NFC to the major retailers until 2018. This is going from bad to worse.

 

[solarguy17]

If the retailers want to eliminate the credit card fees the easiest way they could do it without upsetting many many customers would be to require people using a debit card to enter their PIN rather then swipe and sign like a credit card.

Swiping a "VISA" debit card allows VISA to charge the retailer the same fee on the transaction just as if it was a credit card. However, if they require you to use your PIN with any Debit Card transaction that fee is eliminated.

It would be annoying and there maybe a reason they don't do that, but it would do the same thing without majorly upsetting users of Apple Pay/Google Wallet/ISIS, etc.

 

[yaboyac29]

What makes no sense is whether or not a card is swiped or the iPhone is used for payment, the EXACT SAME CHARGE will be applied to the business. It's not like using apple pay causes businesses more money.

 

[d.steve]

What makes no sense is whether or not a card is swiped or the iPhone is used for payment, the EXACT SAME CHARGE will be applied to the business. It's not like using apple pay causes businesses more money.

The point of contention (from the CurrentC merchant's standpoint) is that with Apple Pay, the merchant has to pay the credit card company the same fees that they are trying to fight by setting up CurrentC in the first place!

Read the techcrunch article. It really is a good read.

 

[JayLenochiniMac]

The point of contention (from the CurrentC merchant's standpoint) is that with Apple Pay, the merchant has to pay the credit card company the same fees that they are trying to fight by setting up CurrentC in the first place!

Read the techcrunch article. It really is a good read.

So are they going to stop accepting credit cards altogether once they set up CurrentC? That won't go over too well with many of us.

 

[d.steve]

So are they going to stop accepting credit cards altogether once they set up CurrentC? That won't go over too well with many of us.

Certainly wouldn't, so i doubt it. One end game would be to reduce swipe fees for which they have no leverage against today.

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So think on this for a sec...what if the reason why fraud protection is perceived as such a benefit of credit cards is because the credit card system itself is designed such that fraud is inherent?

I don't think apple pay is fraud proof (!) and CurrentC definitely isn't, nor is any system guaranteed to be fraud proof, but let's realize that the currently flawed system makes fraud protection front and center.

 

[Rigby]

CurrentC is horribly flawed, especially from the consumer side, but the really unfortunate thing is that neither CurrentC nor Apple Pay is a solution to BOTH problems and in being separate cause them to conflict with each other.

But Apple Pay can be used for debit transactions as well, which have much lower fees than credit card transactions. Wouldn't it be much easier for the merchants to encourage customers to use debit cards, Apple Pay or not?

The Techcrunch article is a good analysis though. Even if CurrentC fails in the end, it might give the merchants some negotiation leverage. In the end, this game is not merchants vs. Apple, but merchants vs. banks.