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11/25/2024 08:57:27 am

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CurrentC vs Apple Pay War Looms as Merchants Reject New Electronic Payment Service

Apple Pay

(Photo : techtimes.com)

If an iOS versus Android war rages in the smartphone and tablet market,  a new battle is building up in the area of electronic payment.

At least 50 merchants across the country are rejecting the newly launched Apple Pay rolled out last week by the Cupertino-based tech giant. SFGate reports that pharmaceutical retailers CVS and Rite Aid disabled Apple Pay from their outlets just after a few days of trial.

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The explanation for the action by the two drugstores, according to Reuters, is that the two retailers belong to a consortium developing an alternative electronic payment service called CurrentC. The report identified the new business group as Merchants Customer Exchange (MCX).

Besides CVS, which counts 1,700 branches, and Rite Air, which has 4,570 outlets, also included in the consortium is retail giant Wal-Mart stores that comprise the 50 members of MCX so far.

New York University marketing and information technology professor Anindya Ghose said the move by the two pharmacies is an omen of a forthcoming war in the mobile pay system in the U.S. as merchants tap short-range wireless signals from chips embedded in smartphones.

Apple is actually a late bloomer since Android-run smartphones have been using the NFC technology. Apple only started to embed the NFC chips in its iPhone 6 and iPhone 6 Plus flagships rolled out on Sept. 19.

By tapping mobile payment solutions developed by retailers themselves instead of third party developers, store owners help shoppers avoid paying credit card transaction fees to card firms like Visa and Mastercard. Their fees are between 2 and 3 percent of the transaction.

Mastercard disagreed with unexpected move of the two drugstores, saying, "We are disappointed that Rite Air and CVS have decided to block their customers from using the payment method of their choice," according to the company's spokesman Jim Issokson.

The members of the consortium have ditched not only Apple Pay but also other mobile payment systems, particularly Google Wallet and Softcard.

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