Apple Pay News: CVS and Rite Aid Block Apple's New Payment System
With the launch of Apple's new payment system, Apple Pay, many tech experts predicted that major retailers will be quick to adopt the new system as an alternative to using credit cards to make purchases. However, last Thursday, Rite Aid reportedly stopped accepting payments made through Apple Pay, while CVS also blocked the service on Saturday.
This is not the first time that a company has said no to Apple Pay. Back when Apple announced its new payment system in September, both Walmart and Best Buy said that they had no plans to use the system in their stores.
According to Forbes, the most likely explanation why retailers are shying away from Apple Pay is because they have formed a consortium called the Merchant Customer Exchange (MCX), which is developing a rival system set for release next year called CurrentC. The MCX consortium has been working on the CurrentC system since 2012.
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While the CurrentC enables merchants to monitor the shopping habits of its users to make it easier to track down customers with loyalty programs, Apple Pay keeps transactions private, which makes it almost impossible to track purchasing activity.
Aside from monitoring customer's purchasing spending habits, one of the key reasons why MCX has been working on an alternative mobile payment solution is to enable merchants to avoid paying the 2 percent to 3 percent credit card transaction fees charged by major credit cards such as Visa and MasterCard.
According to USA Today, big retailers share a common dislike of paying these fees, as former Walmart CEO Lee Scott is reported to have said, "I don't know that MCX will succeed, and I don't care. As long as Visa suffers."
