Apple Pay

The Real Reason Rite Aid Dumped Apple Pay

Ring, ring.

Hi, Rite Aid. This is CurrentC (or a CurrentC rep) calling. You might not remember this since it was a few years and several marketing executives ago, but you signed a contract that pledged your undying and exclusive love to our own proprietary in store mobile payments system.

Yes, two or three years ago when we asked you to do that, it probably didn’t seem like much of a risk since the big fox we were worried about letting into our hen house was Google Wallet. And, that’s gone nowhere fast. Oh, and of course, we also didn’t want to be forever held captive to the network’s interchange fees, either. Remember, we all agreed, then, that getting a low cost payments’ method for our customers to use and getting our customers squarely under our control was a worthy and noble cause.

But, never mind that that it’s been all this time and all you have to offer your customers now is an apology for not being able to accept Apple Pay. You simply can’t do it. And, the fact of the matter is that you’ve been caught two-timing with Apple Pay, and that’s clearly a violation of your contract with us. So, you better disable your terminals, and let your customers know that in six or nine months or sometime in 2015, we’ll give them something that they’ll love. So, just sit tight.

Of course, this isn’t a real conversation, but it may not be that all that far from the truth.

Last week, it was announced that Rite Aid abruptly deactivated its terminals and would no longer be able to accept Apple Pay. There was speculation swirling that it was because of concerns over security or data privacy, both totally ludicrous claims/spin given Apple’s highly secure payments scheme and total inability to see transaction or cardholder data. Say what you will about Apple Pay and its chances of success, but it is a highly innovative and secure method of payment using the mobile device.

Over the course of the last few days, more details have surfaced. And, in the days of swirling social media, no longer can one bury news on a Friday or Saturday. The Twitter sphere has been alive with gripes from Rite Aid consumers over not being able to pay with their favorite method of payment. CVS has also now also disabled its terminals as of 10/25. And, a leaked memo to Rite Aid employees all but sealed the deal on the reason that Apple Pay was disabled: it competes with CurrentC/MCX.

"Please note that we do not accept Apple Pay at this time. However we are currently working with a group of large retailers to develop a mobile wallet that allows for mobile payments attached to credit cards and bank accounts directly from a smart phone. We expect to have this feature available in the first half of 2015."

"If customers attempt to pay for a transaction with Apple Pay, a message will prompt both customer and cashier for a different form of payment. Please instruct cashiers to apologize to the customer and explain that we do not currently accept Apple Pay, but will have our own mobile wallet next year."

The angst going on inside of the CurrentC/MCX member merchant community must be close to, if not, apocalyptic.

My commentary this week on “The Scariest Things in Payments” has a whole section on why CurrentC could be one of the scariest things to knock on the merchant’s doorstep this year. I write that “you don’t have to be a Rhodes Scholar to figure out that the abrupt about face at Rite Aid and CVS, CurrentC merchants, was the result of some sort of disconnect between the marketing peeps wanting to offer Apple Pay and the finance/treasury folks that signed the contracts a few years ago that said they couldn’t."

But I also offer that horror movie playing between Treasury/Marketing folks at every CurrentC/MCX merchant could get pretty gruesome.  And, I think that this could even foreshadow the second big post Apple Pay shift in payments – the unraveling of CurrentC.

My initial take on MCX, when it was MCX and launched was that it was a fairy tale. Two years and one Apple Pay later, it may turn out to be a very scary Halloween story.

There’s surely more to come.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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