Michal Ždanský Last week, Apple launched its mobile payment solution, Apple Pay, in the United States. In order to bring the entire platform to a successful conclusion, the company had to cooperate not only with Visa, Mastercard and local banks, but also with a number of retail chains to ensure a smooth operation on the day of launch.
The first few days were really smooth, with over three million people activating Apple Pay within 72 hours, that's more than the total number of contactless card holders in the US. Apple Pay has certainly had a successful start, but its success has not gone down too well with the MCX (Merchant Consumer Exchange) consortium. Membership chains like pharmacies Rite Aid a CVS completely they have blocked the option to pay with NFC after discovering that their terminals work with Apple Pay even without explicit support.
The reason for the blocking is the payment system CurrentC, which the consortium is developing and plans to launch within the next year. MCX members are required to use CurrentC exclusively, allowing Apple Pay would face financial penalties according to the consortium's rules. if Best Buy, Wal-Mart, Rite Aid or another member currently wanted to support Apple's payment system, they would have to withdraw from the consortium, for which they face no penalty.
[do action=”quote”]CurrentC has two main goals: avoiding payment card fees and collecting user information.[/do]
Although they appear to be in direct competition, the goals of Apple and MCX are very different. For Apple, the Pay service means better comfort for the customer when paying and introducing a revolution to the American payment system, which, to the surprise of Europeans, still relies on magnetic strips that can be very easily abused. Apple takes 0,16 percent of each transaction from the banks, ending Apple's financial interest. The company does not collect user data about purchases and carefully guards existing information on a separate hardware component (Security Element) and only generates payment tokens.
In contrast, CurrentC has two main goals: avoiding payment card payment fees and collecting information about users, especially their purchase history and related customer behavior. The first of the goals is understandable. MasterCard, Visa or American Express charge something like two percent for transactions, which merchants either have to accept as a reduction in margins or compensate by increasing the price. Bypassing fees could thus hypothetically have a favorable effect on prices. But the primary goal of CurrentC is the collection of information, according to which merchants can send, for example, special offers or discount coupons to lure customers back to the store.
Unfortunately for customers, the security of the entire CurrentC system is incomparable to Apple Pay. The information is stored in the cloud instead of a secure hardware element. And it was hacked even before the official launch of the service. Hackers managed to get the email addresses of customers who participated in the pilot program from the server, which CurrentC later informed its customers about, although it did not provide more details about the attack.
Even the way of using CurrentC does not exactly speak in favor of the service. First of all, the service requires you to enter a driver's license number and a social security number (the equivalent of a birth number in our country), i.e. very sensitive data, for identity verification. But the worst part comes with the payment. The customer must first select "Pay with CurrentC" at the terminal, unlock the phone, open the app, enter a four-digit password, press the "Pay" button, and then use the camera to scan the QR code on the cash register or generate your own QR code and show it in front of the scanner. Finally, you choose the account with which you want to pay and press "Pay now".
If Apple in your sketch, where he showed how inconvenient it is to pay with a magnetic stripe card, swapped the card for CurrentC, maybe the sketch's message would have sounded even better. In comparison, when paying with Apple Pay, you only need to hold your phone near the terminal and place your finger on the Home button for fingerprint verification. When using more than one card, the user may choose which one he wants to pay with.
After all, customers expressed their opinion on CurrentC in the evaluation of the CurrentC app v App Store a Play Store. It currently has over 3300 ratings in the Apple App Store, including 3309 one-star ratings. There are only 28 positive reviews with four stars or more, and even those aren't flattering: "Perfect...ideal implementation of a bad idea" or "Awesome app that makes a product of me!" 3147 one-star. To make matters worse, it is also gaining in popularity the MCX boycott page, which shows for each chain in MCX alternatives where customers can pay with Apple Pay.
It will be the customers who will decide the success of this or that system. They can make it clear with their wallets which option is more feasible for them. Apple Pay can thus easily become for retail chains what the iPhone is for operators. That is, where his absence will be reflected in sales and the departure of customers. Moreover, it is Apple who holds all the trump cards. All he needs to do is remove the CurrentC app from the App Store.
[do action=”quote”]Apple Pay can easily become for retail chains what the iPhone is for carriers.[/do]
However, the whole situation is unlikely to escalate to such proportions. MCX managing director Dekkers Davidson admitted that consortium members could support both systems in the future. However, he did not provide any details on when that might happen.
The fact remains that with Apple Pay and its anonymity, most merchants will lose a lot of customer information that is otherwise available to them when paying with a regular card. But Apple could soon offer a good compromise solution that will be beneficial for both customers and merchants. According to some reports, the company is preparing a loyalty program that it could launch this Christmas season.
The program should probably be linked to the use of iBeacon, where customers would receive offers and discount coupons through the relevant application, which alerts the customer in the vicinity of the iBeacon using a notification. Apple's loyalty program is designed to offer exclusive discounts and special events for customers paying with Apple Pay. The question is how customer information will fit into this, i.e. whether Apple will provide it to marketers with the explicit permission of users, or whether it will remain anonymous. We may find out this month.
in the App Store and Play Store. It currently has over 3300 ratings in the Apple App Store, including 3309 one-star ratings. There will most likely be a typo in the numbers
They write "over 3300" and the screen shows that there are 3346, so it's not a typo. But that sentence sounds silly, it's true.
Is it possible to pay with Apple Pay in CZ or SK? If so, how? And if not, when will it come to us? :)
it won't work in Europe anytime soon. maybe never. there was already an article for that. the fees for card transactions are very low in Europe and if the bank had to give something to Apple, it would have almost nothing left. moreover, those fees will still be unified within the EU and probably reduced.
You're naive if you think that apple doesn't collect information about you :D they even have your fingerprints and it's naive if you think that the American government can't get them from them either directly or indirectly ;)
He doesn't have any fingerprints, obviously you don't know anything about their system. But enjoy your paranoia.