In shocking turn of events, the long list of retailers accepting Apple Inc. (NASDAQ:AAPL) Apple Pay has shrunken down, as major chains such as CVS and Rite-Aid, among others, have decided to take an oath of celibacy and part ways with the new mobile payment system by Apple.
Earlier, customers came to the internet to point out the non-acceptance of Apple Pay at Rite-Aid and CVS stores. Initially, the issue was suspected to be with the NFC system itself because, according to reports, Google Wallet, which came before Apply Pay, failed to work as well.
However, this morning, a leaked document from internal Rite-Aid communications networks indicated that CVS and Rite-Aid have stopped accepting NFC payment method, which means they will also not be using Apple Pay in their store outlets countrywide.
This internal document circulated within Rite-Aid stores this morning; it stated that all stores are to discontinue the use of NFC payment systems immediately. The document also provided specific guidelines for cashiers to inform customers about this change of policy at the time of purchase.
Apple Pay, which is an NFC-based mobile payment transaction system, became an available feature on the new iPhone 6 and 6 plus only last week. Many CVS and Rite-Aid customers immediately upgraded to the iOS 8.1 update (which carried the payment feature), and posted success stories on the internet of having paid at certain drug stores with Apple Pay.
However, the termination of the NFC payment system from all CVS and Rite-Aid stores within a week of Apple Pay’s launch has nothing to do with the NFC technology itself. The leaked document also revealed that CVS and Rite-Aid will be shifting to a new mobile payment system by the start of next year.
In its internal document, Rite-Aid indicated that it will introduce a new mobile payment system in the first half of 2015, which will be accepted at all Rite-Aid stores.
Both CVS and Rite-Aid are members of Merchant Customer Exchange, a venture built by giants such as Walmart, Target, as well as Best Buy. MCE will soon launch CurrentC, a mobile payment application, in early 2015. Because of its deep roots in the retail industry, the new payment method is expected to have widespread acceptability, approximately in over 110,000 retail stores.
Possibly threatened by Apple Pay’s growing popularity among customers, CVS and Rite-Aid have taken a preemptive step to discourage its use in its stores. Both the drug store chains will be shifting to the CurrentC payment system in 2015.
CurrentC is a mobile app payment method, which will be available to users on the iOS, Android OS, and Windows. The payment method will not be able to connect credit cards to its systems, like the Apple Pay. Instead, consumers will be required to connect their bank accounts (or merchant debit/credit cards) with their CurrentC app, which they can then use at all retail outlets accepting the CurrentC payment method.
It will be interesting to see whether all the other members of the Merchant Customer Exchange will follow suit and discontinue Apple Pay. Just days after its launch, this was not the kind of start Apple Inc. (NASDAQ:AAPL) was hoping for its payment service.
