Mobile payment options are increasing through several different technologies—or decreasing, as per the latest news on CurrentC (QR code-based mobile payment system), Apple Pay and Google Wallet.
QR code scanning/payments (CurrentC) and NFC are two of the most popular right now, and even Apple Pay NFC is still having major problems with glitches and security issues (Apple Pay glitch sees some early adopters hit with duplicate charges). Early glitches with Apple Pay was traced to, or blamed on Bank of America, according to a report at 9to5Mac:
[pullquote]The Apple Pay problem largely affects Bank of America customers, according to a report on Bloomberg, claims that around 1,000 Bank of America debit transactions on Apple Pay were mistakenly duplicated, seeing some people charged twice.[/pullquote]
[pullquote]Apple Pay users have also complained that their credit cards are not displaying correctly in the Passbook app, while others have reported that their card type is not supported by the service.[/pullquote]
According to an article that appears in The Inquirer:
[pullquote]On Monday it was revealed that US drugstores CVS and Rite Aid had disabled NFC payment readers in their shops, meaning shoppers could no longer use services such as Apple Pay or Google Wallet.[/pullquote]
[pullquote]This decision came as the firms, along with the likes of Walmart and Best Buy, decided to back a competing service called CurrentC, a QR code-based payments service that cuts out credit card fees.[/pullquote]
[pullquote]This news hasn’t gone down well with many, and CurrentC has since received hundreds of one star reviews at Apple and Google’s respective app stores.[/pullquote]
Techcrunch, in their article, CurrentC Is The Big Retailers’ Clunky Attempt To Kill Apple Pay And Credit Card Fees, explores other reasons they believe CurrentC is gaining popularity:
[pullquote]Long before Apple Pay, big brick-and-mortar retail chains were conspiring to sidestep the typical 2% to 3% fees they’re charged by credit card companies when consumers pay with credit. A company called MCX (Merchant Customer Exchange), spearheaded by Walmart, was started to build a mobile payment solution that would become an app called CurrentC that’s preparing to launch, but is already in the app stores.[/pullquote]
In what Techcrunch refers to as “a multi-year plot to ditch credit card fees,” they include the following information:
[pullquote]Originally incorporated in 2011, MCX spent years in a sort of stealth mode working on the payments user experience. The company is run by merchants including Walmart, Target, Best Buy, CVS, Shell Oil, Darden Restaurants (Olive Garden), HMSHost (airport restaurants), Hy-Vee (supermarkets), Lowes, Michaels, Publix Super Markets and Sears. Wal-Mart VP and Assistant Treasurer Mike Cook is considered the MCX group’s de facto CEO, with some joking that MCX stands for Mike Cook Exchange, as FierceRetail reported.[/pullquote]
[pullquote]Together, the companies operate over 110,000 retail locations and process over $1 trillion in payments annually, with a significant chunk coming in the form of credit card payments that cost the retailers fees.[/pullquote]
[pullquote]Walmart has long voiced its disdain for credit card processing fees that drain its slim margins, and even filed an anti-trust lawsuit against Visa and MasterCard over them back in 2003, but rejected the settlement they offered because it wanted more.[/pullquote]
[pullquote]The idea behind MCX was that if enough retailers teamed up, they could convince consumers to adopt their mobile payment system that would let retailers avoid paying credit card fees in the 2 percent to 3 percent range by processing payments through Automatic Clearing House transactions through bank accounts that have much smaller fees. MCX’s app could also help retailers by encouraging loyalty to participating merchants and possibly provide them additional intelligence on their customers.[/pullquote]
[pullquote]If MCX’s app caught on, partner retailers could escape tons of fees, which could directly increase their profits. Alternatively, they could use the leverage of MCX and the threat of sidestepping the processing fees to negotiate lower fees with the credit card companies. Former Walmart CEO Lee Scott reportedly once said “I don’t know that MCX will succeed, and I don’t care. As long as Visa suffers.”[/pullquote]
While no one would shed tears if any of the large credit card companies were to suffer the loss of fees they charge retailers, which we know are inevitably passed on to consumers—one of the more attractive things about CurrentC QR code-based payment system, even Techcruch reveals the utter strength and advantage the QR code system offers retailers:
[pullquote]Rather than NFC, CurrentC uses QR codes displayed on a cashier’s screen and scanned by the consumer’s phone or vice versa to initiate and verify the transaction. The system is also designed to automatically apply discounts, use loyalty programs, and charge purchases to a variety of payment methods without passing sensitive financial data to the merchant.[/pullquote]
No credit card fees? Automatic discounts? Use loyalty programs? No sensitive financial data being exchanged? Sounds like QR codes have once again proved they are not only not dead, but are, instead, the killer method of mobile payments.
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