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The Digital Payments Cold War: In Pursuit of the Almighty Dollar

“We do not currently support Apple Pay!!” According to numerous industry articles over this past weekend from the likes of VergeMashableGigaOm, a number of retailers—Walmart, Gap, Best Buy, Old Navy, 7-Eleven, Kohl’s, Lowe’s, Dunkin’ Donuts, Sam’s Club, Sears, Kmart, Bed, Bath & Beyond, Banana Republic, Stop & Shop, Wendy’s, and most major U.S. gas station chains—have dug their heels in. Collectively, these retailers have formed a joint venture (MCX), to build their own mobile payment app, called CurrentC, which is planned to launch in 2015. MCX has been working on a mobile payment solution since 2011, to avoid paying the 2-3% credit card transaction fees charged by the likes of Visa Inc.

These retailers seemingly have no intention of supporting Apple Pay—at least not yet. Many of these retailers are modifying or disabling their NFC readers, preventing access to not only Apple Pay, but other systems like Google Wallet, Softcard, etc. While banks and credit card companies are behind Apple Pay, larger retailers are digging their heels in, despite the fact that banks are not supporting CurrentC.

What makes this all the more puzzling is that consumers are fully in control of their spend, and are not afraid to hold brands accountable. Consumers don’t like being told what to do by retailers, and will be further irked when they learn that retailers have deliberately prevented an otherwise convenient service. Furthermore, Apple Pay does a terrific job of improving the customer experience. CurrentC is designed to collect customer data and offer coupons. As for their effortless experience? Just download the retailers stand-alone app, unlock the device, launch the app, sign in…all before checking out! There are already Reddit threads encouraging iPhone and Android customers to join forces and boycott MCX retailers.

When one considers that QR-Code based CurrentC is a less secure offering than ApplePay, and gives retailers persistent access to consumers’ payment information, it’s hard to see consumers embracing this payment option…especially considering the steady stream of retail data breaches being reported. There are already some interesting CurrentC app reviews.

While writing this post, we came across a storm of consumer activity around the decision to turn off Apple Pay. Take a look at recent Facebook posts on CVS and Rite Aid, and you will see hundreds of comments slamming the decision and customers taking their business elsewhere. The same is true on Twitter. The social media command centers for those two companies must be under some major stress right now. They’ve also managed to unite the iOS and Android fan factions against them, definitely NOT a good thing for your brand. Walgreens is capitalizing on the turmoil on its own Twitter feed with an appropriate message to consumers that “the choice is yours”.

Ironically, this type of publicity is terrific for Apple Pay and for Walgreens, and will ultimately trigger a retailer stampeded to embrace Apple Pay.

Customer Experience rules!