NFC, Apple Pay, and Retailers

October 29th, 2014

A battle is being waged between Apple, Google, and major retailers over how consumers pay for their items at the register. Retailers including CVS, Walmart, Best Buy, and 7-Eleven have effectively disabled their NFCs (Near field communication reader) to not be able to read Google Wallet and Apple Pay apps. Why is this happening and what would be the reason for retailers making it more difficult for customers to purchase products? Let’s first review the details:

In 2011, Google unveiled the Google Wallet. The Google Wallet is a mobile payment system meant to streamline payments at the checkout register using near field communication (A short ranged wireless communication system to interact with nearby readers). This application was a breakthrough in consumer convenience and the beginning of the end for physical wallets. The process was highly secure utilizing PINs and fingerprint scanners while being less risky than carrying your actual wallet around. Many retailers attempted to follow suit yet many failed to provide the convenience to justify replacing the wallet. Soon enough, Apple took a shot at this craze and unveiled their own mobile payment system, Apply Pay on October 20, 2014. Apple Pay has been praised as easy to use and very smooth. With this technology the future wait lines down the aisle would be extinct and purchases could be made instantaneously. Life would be improved everywhere with the time saved.

So why are retailers blocking something that would allow them to make millions of more dollars and keep customers coming back to purchase even more? The failure of the certain retailers to launch an effective mobile payment system and paying credit card fees has led them frustrated. An association called the Merchant Customer Exchange has begun to launch CurrentC, another mobile payment system. However, this one does not use NFC but instead requires the user to scan QR codes via their phone. The retailers that blocked Apple Pay and Google Wallet are part of the MCX and spearheading CurrentC by blocking out competitors while also discouraging credit card use from customers to sidestep the fees. There has been criticism on the application because of it’s direct link to users bank account and other security flaws.

In the end, this fight is about the bottom line for retailers. Retailers believe that by kicking out competitors and encouraging CurrentC usage they can generate greater profits by avoiding credit card fees. Unlike Google Wallet and Apple Pay, CurrentC is not meant to streamline or help consumers pay for products and not a progressive application.

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