Retailers Take on Apple Pay, Google Wallet, Paypal
No one is saying why officially, but some experts speculated that it’s because Apple Pay poses a threat to CurrentC, a mobile payment scheme being developed by a retail consortium called the Merchant Customer Exchange, or MCX.
The exchange is headed by Wal-Mart and includes Best Buy, Old Navy and Target, among others.
“Merchants are betting on the future of CurrentC because it disintermediates the existing payment networks [Visa, MasterCard, etc.] and allows them [the retailers] to save on interchange, which is 2-3% of the transaction,” Thiago Olson, CEO of payment systems developer at Stratos Card in Ann Arbor, Mich., said.
The problem is CurrentC seems designed to benefit the retailers at the cost of a poor user experience. The mobile payment model is now in pilot in Minnesota.
One look at the app in Apple’s App Store may reveal all consumers might want to know. With more than 1,200 reviews, CurrentC has amassed a solid one-star rating out of five stars.
Said one single-star reviewer, “I wish I could give it less stars.”
Instead of NFC, CurrentC uses a QR code-scanning scheme and requires a user’s Social Security number, driver’s license number, and bank account information for registration. This makes it cumbersome and, at least in perception, risky.
“The NFC payment experience is much more seamless,” Olson said. “The payment experience with a card is still mighty easy.”
With its emphasis on bypassing the credit card payment rails and its use of ACH as the final means of reconciliation, MCX also appears to be putting the squeeze on Paypal, which pioneered this approach. Despite its presence in a handful of major retailers such as The Home Depot, Paypal has yet to cause any major disruption in the payments industry.
“Paypal has struggled with its user experience as it does not own the operating system nor the device,” Olson said. “Paypal’s payment app is generally regarded as having a poor user experience because it takes much more time to make a payment than other payment options.”
In other words, convenience is still king among consumers.
If MCX and CurrentC can’t deliver a user experience that’s more convenient than Apple Pay and other NFC payment schemes, its long-term viability is questionable at best, some experts have warned.