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Benefits of Apple Pay over CurrentC to retailers highlighted as Whole Foods transactions hit 1%

Shortly after retail chain Whole Foods announced that it had processed 150,000 Apple Pay transactions in the three weeks since the service was launched – estimated at around 1% of the company’s sales – a business author and senior Hitachi consultant has spoken about the twin attractions of Apple Pay for retailers.

Jim Maholic, author of Business Cases that Mean Business and vice president in Hitachi Consulting, said major retailers had two main reasons to favor Apple Pay over rival mobile payment service CurrentC … 

First, he told CIO magazine, Apple Pay attracts the right kind of customers.

“There’s a certain number of affluent customers who use the iPhone 6,” says Maholic. If one store offers Apple Pay and the other doesn’t, those well-heeled customers are more likely to walk in the Apple Pay door. “Now that I’ve got that customer, it’s harder for somebody to steal that customer.”

Second, and of keen interest to Chief Information Officers, the security of Apple’s payment system removes the fear that grips most retailers these days: the risk of customer data being hacked.

The credit card isn’t transmitted during the transaction, and the retailer will not have the credit card number in [its] systems,” says Maholic. That way, even if the retailer is hacked, the customer’s information isn’t put at risk. “As a CIO, I [would] feel better if I have more customers using Apple Pay, because I haven’t exposed their numbers to risk.”

While Whole Foods didn’t discuss their 150,000 Apple Pay transactions in percentage terms, Mike Dudas, former mobile commerce lead at Google and PayPal, did the sums.

[tweet https://twitter.com/mdudas/status/530850655611920384/]

The 1% number is an interesting one: it’s the market share percentage Steve Jobs set as the first year target for the iPhone – a number the company achieved. Apple hasn’t announced any Apple Pay targets, but hitting 1% of transactions at a major retailer in just three weeks makes one wonder just what that percentage will be a year from now.

MCX, the consortium behind the competing mobile payment service CurrentC, has been in defensive mode since Apple launched the service. When CurrentC retailers CVS and Rite Aid complied with a clause requiring them not to accept other forms of mobile payment, consumers hit back with a boycott of MCX members – and a panning of the CurrentC app on iTunes. At least one retailer, grocery chain Meijer, also defied the non-compete clause and continued to accept Apple Pay.

MCX at first offered a series of unconvincing ‘assurances’ about CurrentC, then issued a vague statement suggesting that it may be possible for retailers to accept both forms of payment at some unspecified point – and finally said that the exclusivity clause will expire in “months not years.”

Interestingly, while CurrentC may not be faring too well against Apple Pay, at least one competing service appears to have benefited from the media focus on mobile payment: the number of Google Wallet users has doubled since Apple announced its own payment service.

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Comments

  1. Douglas Brace - 9 years ago

    There is another reason why people like Google Wallet or Apple Pay over CurrenC. CurrentC is a direct connection to a banking account. Whether that account be a saving account or a checking account, it is money that you the consumer has. Americans typically purchase things using funds that they don’t have, using a credit card. CurrenC won’t work with a credit card.

  2. OneOkami (@OneOkami) - 9 years ago

    I’ve had a number of different grocery stores (including Walmart) that I’d traditional go to for supplies but after setting up Apple Pay and especially after some MCX members antagonistically deactivated NFC terminals I’ve pretty much consolidated those down to two: Meijer and Whole Foods.

    As I said on one of the original 9to5 Mac articles on this subject, I have no interest in moving backwards in mobile payments and no interest in supporting retailers doing so. Walmart hasn’t seen a penny of my money since then. And indeed what I’ve hoped for the most in the big picture is that there would be enough adoption and voting with (mobile) wallets to generate the numbers to at the very least validate retailers’ choice to embrace and support this method of payment. If that also results in a loss a business for the retailers who don’t choose to support it, fine by me because I see what they’re doing as hindering progress.

    • Gregory Wright - 9 years ago

      Lets be real…you will still have that debit card in your wallet. If you have done business with Walmart in the past you will continue to do so. Why? Because Walmart offer the lowest price on most items. You maybe loyal to Apple but the lower cost always win out. I’d be surprise if you are the exception to that rule.

      • george1620 - 9 years ago

        I actually go to Target even if it’s not as cheap as Wal-Mart. Even if there was a Wal-Mart 5 minutes away, I’d still drive the 15 minutes it takes to get to Target. Unfortunately, neither one accepts Apple Pay. I decided to use that as an example that cheap doesn’t always win.

      • I can guarantee you people don’t need Walmart. I have nit purchased any thing from their in over a year and a half and have never looked back. I have also found Walmart does not have the lowest price on most items, they have just fooled people into beliving this. The big issue with Walmart is the quality of items they sell is so much lower that most other places that you end up losing your savings because of substandard products.

      • iSRS - 9 years ago

        Perhaps there will be people like that. But the fact is that Walmart is not always the cheapest anymore. They used to be, got to a point where everyone believes they are, and now the others have started competing.

        Like @OneOkami provide his personal take/anecdote, I will do the same.

        Long time CVS customer. Since they shut off NFC payments, I have not been in one. Transferred my Rx to the Walgreens across the street. When doing so, the Pharmacist asked why. When I stated that Apple Pay was a reason, he said I wasn’t the first to say that, which is why he asked. (I wonder if they are tracking it nationally). Now, this isn’t a big town (it is on the line between a town of 11K and 8K), but we can’t be an anomaly. It IS making a difference, and people ARE modifying their behaviors.

      • Ethan Morgan (@duepeak) - 9 years ago

        I will second what others are saying. I love Target and I am not going to stop shopping there, but I actively go to Jewel more now because they accept Apple Pay, just makes life easier. If I need to go to a CVS/Walgreens, I will go out of my way to make sure I go to Walgreens now. I think people are voting with their wallets and it will only get louder as more people own iPhone 6/Plus and Apple Watch

      • rahhbriley - 9 years ago

        With minimal effort, it’s not that hard to break away from shopping at big box stores. The winds are a changing my friend. I haven’t shopped at Walmart, Target, K-Mart in over 5 years. I’m not bringing them down by any means, but I’ve supported my local economy more, have gained business contacts that have paid me more back than the lack of savings I gave up by not supporting Big Box.

        I haven’t shopped at a Kroger in over 3 years. There a many alternatives, admittedly easier some places than others. I live in a town of under 100k people. So I’m not in a huge city that has lots of options either. Granted I don’t live in a town of 1000 people, but I know it can be done.

        Try ePantry or Door to Door organics. Find a local butcher, farmers market, pharmacy, hardware store, etc. Stop being so lazy as to have to have the absolute lowest price and everything at one location. Plan your trips, be an active consumer and stop being a lazy robot that feeds the monsters that are big box stores. There are many reasons that paying a little more up front from a local retailer for a better (or even identical) product pays off. Local income (and income tax), community, longer lasting items, higher quality service, healthier items, etc.

        Rant out.

      • “the lower cost always win out”

        Hell no it does NOT. What the hell are you talking about?

      • theKNiCK (@theKNiCK) - 9 years ago

        Nope. For years I have driven past Wal-Mart to shop at Target. I found the prices to be too similar to worry about and the Wal-Mart is just unpleasant to be in. Kind of grimy, cluttered aisles, and not a huge selection for a store that takes up two zip codes. They do keep the grocery section nice and clean, but the rest of the store, not so much. I won’t go into Wal-Mart’s business and employee practices because I’ve heard some similar complaints about other chains, but it certainly isn’t an enticement.

      • Carlos Marcos - 9 years ago

        Your wrong, there is a broad range of consumer preferences when it comes to cost and the customers most concerned about cost are the least desirable ones. The very people who tend to own Apple products are the most affluent and likely the least concerned about cost.

        I would not walk into a Wal Mart ever, they are a bain to our society, underpay their employees,are understaffed none the less and sell junk. Yes I walked in once, by necessity.

  3. 89p13 - 9 years ago

    And, as always, the Consumer votes with their $$$$

    It appears that CurretC is a stillborn..

    Screw WalMart and the MCX consortium!

  4. Mike Blume - 9 years ago

    There are many reasons why CurrentC has issues:

    1) it requires you to open an app

    2) it requires the cashier to scan your phone (possibly twice – I was confused about the transaction process)

    3) there is debate about it sending more personal information along with each transaction — does it really need to know your age, weight, etc — this could just be rumors, but companies tend to grab as much information as they can collect

    4) you might not want to share your information with the other business in the consortium (for whatever issue – whether it’s trust, or not wanting to do a certain business any favors), thus privacy concerns

    5) MCX thought they could do something better than Apple and Google, I like the competition, but the exclusion of the alternatives at their retail outlet demonstrates their lack of confidence in their own marketing or technology

    6) CurrentC data is stored in the “cloud” (I dislike that term) and susceptible to villainous parties gaining access to that information

    I’m sure there are many more reasons, most likely ones that are even more important, but these are just the quick ones off the cuff, which are pretty extreme by themselves when you think about it.

    • Collecting personal data is not a “rumor”, it’s a bonafide fact.

      The CurrentC app has a LOT of opt-ins, one of them asking for medical information as well as the state of your financials. Considering they’re already be connected to your bank account having a gander at your financial situation wouldn’t be too hard.

      Again, these are opt-ins but I have to believe that they wouldn’t put those options there if they didn’t think it would make the app/service better.

      Apple and Apple Pay don’t want to know or need to know ANY of that information in order for you to buy something. Your credit card company already has as much information as they need from you anyway and frankly your health status isn’t a necessary clause to doing business with them. Money is their only concern. You could be dead and they’ll still take a monthly payment so long as it’s getting paid.

      Morbid but my point is that CurrentC is just a bad idea from all fronts and their motivation isn’t for a better customer experience but rather to distance themselves from credit card fees. I understand the need to cut back where you can but the companies complaining about this are raking in billions every quarter but apparently it’s not enough.

  5. Scott Hilt (@scotthilt) - 9 years ago

    Since I’ve setup Apple Pay I find myself only going to Whole Foods, Walgreens & Home Depot. I read somewhere that Home Depot had disabled NFC payments. Well HD’s in my area have not. I’ve made 3 Apple Pay purchases at HD since launch day. I’ve also found a couple local independent gas stations and shops where Apple Pay appears to work with no issues. I’ve even used Apple Pay right at the gas pump. The pump supported NFC so I tried it and it worked. The only retailer I still shop at that doesn’t (yet) support Apple Pay is Target. They already support it in their app and on their website. I fully expect them to add Apple Pay to their stores soon enough. My bank has already said that Apple Pay at the ATM is coming soon. I’m really excited for that because I hate sticking my card in ATM’s bc of possible skimmers.

    • iSRS - 9 years ago

      Same here for Home Depot. JC Penney, too, though they ask to see the card, which defeats the purpose.

    • george1620 - 9 years ago

      Apple Pay at an ATM? That is really cool. What bank do you have? Maybe I will switch over. lol

  6. Fallenjt JT - 9 years ago

    Use credit cards where NFC payments are not accepted. it is one way to punish them.

  7. Jeff Jacobson - 9 years ago

    I can see where Walmart is coming from. They gross near $500 billion annual at a very slim profit margin. I’m guessing 75% credit card payments. That’s billions in fees they pay to mc/visa/amex to offer the convenience. It could be a major portion of there profit. If they could come up with a way to accept only Apple Pay transactions that are tied to a checking or savings it would be a win / win / win / lose. The lose would be visa/mc/amex

    • 89p13 - 9 years ago

      And there goes ANY & ALL protection from fraudulent use of your banking accounts tied to either ApplePay or CurrentC.

      Credit Card Fees are a part of doing business and if WalMart stopped using Credit Cards, they would go under in a very short time. I’m sure the percentage of customers who are using credit cards at WalMart is very high – if your don’t have the cash, what do you do – you pull out your credit card and either figure you’ll pay your bill in full or you’ll float the balance and pay outrageous interest on that balance!

      I’d bet WalMart has less then 15% of consistently cash paying customers.

      • Jeff Jacobson - 9 years ago

        You still have protection with your atm card. If someone gets your atm, guesses yours pin code and cleans you out, your bank will cover the charges. I’m sure Walmart is happy to pay the fees for people using credit cards to live beyond the’re means. It’s the people using credit cards instead of cash or check and then paying the card in full every month. Merchant gets hit with 3% for something that might be marked up 10%.

      • vpndev - 9 years ago

        Jeff: your bank may protect your ATM/debit card but it is not REQUIRED to do so. With credit cards your liability is limited by Federal law. Big difference.

  8. causality27 - 9 years ago

    There isn’t anything consumer friendly about CurrentC. It’s totally unsafe and stores your most important information in the cloud. Serious issue that you have to give them your bank details, ss# and drivers license. Then it’s a hassle to use too compared to Apple pay.

    How to use CurrentC:

    Step 1) unlock phone
    Step 2) open the CurrentC app
    Step 3) scan the cashier’s QR code
    Step 4) if the scan doesn’t work, enter the code manually
    Step 5) let the cashier scan the code on your phone
    Step 6) if the scan doesn’t work, give your phone to the cashier so he/she can enter the code manually

    How to use Apple Pay:

    Step 1) hold your iPhone to the pay terminal while touching the home button
    Step 2) there is no step 2

  9. Ethan Morgan (@duepeak) - 9 years ago

    I have been using Apple Pay at Jewel since it debuted. Jewel just updated their credit card machines and it accepts NFC by default.

  10. jimgramze - 9 years ago

    I do understand not wanting to pay transaction fees, but disallowing NFC payments while still taking plastic is hypocrisy. What it currently boils down to is that businesses who can take NFC payments and refuse to are turning away business rather than making a little less from that customer. That is stupid and creating bad will.

    It is unfair to say that Apple Pay — NFC — is beating CurrentC. CurrentC is not out yet so there is no metric to compare. At least let the team take the field before declaring the final score.

  11. jimgramze - 9 years ago

    Serious question. My debit card can be used either as a debit card or as a credit card so far as the way the transaction is handled and fees are charged which do not affect me except for how much money I can spend with it in a single day.

    With Apple Pay, which method is the default. I assume credit because that is less limiting to the user and also that the transaction fee is typically higher. Anyone know? I don’t have my new iPhone until the end of the month.

    • george1620 - 9 years ago

      That’s a very good question. I’ve used a couple of debit cards at Walgreens and they both asked me for my PIN number. That’s most likely a debit transaction was made. I’ve yet to use a credit card. I’m wondering whether or not it actually defaults to one form of payment.

    • sau124 - 9 years ago

      Apple Pay registers your card. If you register a debit card all transactions will be processed as debit. I personally do not use debit cards in Apple pay but this is something I read on some other thread.

      • Richard Hancock - 9 years ago

        It has more to do with the type of card. You can still use a debit care in ApplePay as a credit card. Just hit credit on the terminal. The terminal detects what kind of card it is and adjusts accordingly. Debit Card transactions cost less than Credit Card ones. However, ApplePay transactions cost even less than Debt Card ones.

        I’ve used it at Walgreen’s once and they were the only ones to do that thus far.

    • vpndev - 9 years ago

      I believe that all Apple Pay transactions are handled as credit. I’m not sure whether or not you can even choose debit (but I don’t know).

    • laylageekprincess - 9 years ago

      I’ve been using Apple Pay and the only option is credit.

  12. george1620 - 9 years ago

    I totally agree with Maholic’s first comment. I used to shop at CVS. I switched over to Walgreens (which is across the street from CVS) because they accept Apple Pay. I don’t see myself going back to CVS nor Rite Aid.

    As a business, I wouldn’t want to lose certain affluent customers because they will most likely be the ones spending more money, especially now that Apple Pay has made it even easier to do so. This MCX payment system is backwards, in my opinion.

  13. jaredporter2014 - 9 years ago

    I am angry that (of all retailers) Best Buy does not accept Apple Pay. They sold me my iPhone in the first place! Best Buy should participate with Apple out of loyalty to the brand that constitutes a significant portion of their business!

  14. Mark Dowling - 9 years ago

    My current contract with ma bell is up fall of 2015. By then I can see if stores that don’t have apple pay switch. My feeling is they don’t want to invest in a bad business model with mobile payment and the costs associated with equipment upgrades. When stores see users above 8% sales then they’ll do the right thing. Until then I’ll stick to reading more iphone 7 leaks!

  15. MurphyMac (@murphymac) - 9 years ago

    Despite how bad CurrentC looks on paper — their PR might be even worse. They shouldn’t let Dekkers Davidson do any more interviews.

    They haven’t gotten ANY positive spin on their situation.

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


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