Apple’s new mobile payment system, Apple Pay, has only been working in the United States for the best part of a week.
But already it’s facing a huge challenge to its attempt to become the main way to pay for low ticket items without cash.
Two major US pharmacies, Rite Aid and CVS, this weekend stopped taking any NFC payments, as they begin their own attempt to develop a rival platform in conjunction with other retailers.
A memo to Rite Aid staff explained that the company is ‘working with a group of large retailers to develop a mobile wallet’.
CVS has apparently told its workers to switch off NFC. Both firms are part of Merchant Customer Exchange (MCX), an alliance building a service called CurrentC.
Big names like 7 Eleven, Gap, Shell and Walmart are all listed on the group’s website as partners.
Apple has done an impressive job of securing help from major US banks and retailers when it comes to Apple Pay.
The beefed up security of the iPhone 6 and iPhone 6 Plus (via Touch ID) have ensured it can offer better fraud protection for both banks and customers compared to Google’s rival Wallet service.
But is that going to be enough if retailers are starting to get antsy about Apple Pay?
MCX’s roll call is a who’s who of the high street and it seems that as far as Rite Aid and CVS are concerned, you can’t support Apple Pay and be a member of MCX too.
This is a major challenge for Apple’s new service and could put it on a collision course with the very retailers it needs to keep sweet in order for Apple Pay to find traction among mainstream users.
On the other hand, denying customers the use of Apple Pay is a bold and dangerous move.
The NFC chip in Apple’s new iPhones only works with Apple Pay and you can be sure Tim Cook and co won’t be bullied into opening it up for retailers to make their own apps.
That way would see Apple cede control and perhaps even create a greater fraud risk.
With that in mind, annoying millions of iPhone owners by denying them the chance to pay with their handsets is only likely to drive business to rivals.
Making this move is not dissimilar to FIFA only allowing football fans to buy World Cup tickets with MasterCard or the IOC insisting only Visa be used in London’s Olympic stores in 2012.
It creates consumer confusion and stymies choice. MCX may want Apple Pay and by extension iPhone NFC to be opened up, but if they wind up consumers in the process, they’re likely to pay a hefty price at the checkout.