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Blocking Apple Pay is Anti-Consumer (Op-Ed)

Photo credit: MasterCard

(Image credit: Photo credit: MasterCard)

It’s hard to feel sorry for a company that just posted $42 billion in revenue during the most recent quarter. And I don't feel sorry for Apple. But I do feel bad that shoppers will be forced to use an alternative to Apple Pay that looks a lot more cumbersome.

Over the weekend, CVS and Rite Aid decided to turn off NFC payments in their stores, which ostensibly allowed Apple Pay to work in their locations. These same payment terminals also supported Google Wallet, although that solution for Android phones never took off. Why did CVS and Rite Aid pull the plug? Because they'll be rolling out a rival payment system in early 2015 called CurrentC, backed by a consortium called Merchant Customer Exchange (MCX).

Too bad CurrentC looks as convenient as writing a check. Actually, it's worse.

Based on a report from TechCrunch, paying with CurrentC will involve multiple steps. First, you unlock your phone, then open the CurrentC app, then open a code scanner to scan a QR code displayed on the cashier's screen.

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With Apple Pay, you simply hold your phone up to an NFC-equipped payment terminal, then press your finger on your iPhone 6 or iPhone 6 Plus Touch ID sensor. You don't even need to unlock your phone. It's no contest.

CurrentC isn't entirely awful. The payment system will integrate with retailers' loyalty card programs, offering shoppers' discounts and other rewards. Ultimately, though, Walmart, Best Buy, Rite Aid, ExxonMobil and other heavy hitters are embracing MCX for two keys reasons: the ability to sidestep credit card processing fees and gather precious data on its shoppers.

CurrentC will tap your debit account directly instead of a credit card, which will allow retailers to wring more profit out of each sale. And because retailers will be able to monitor your shopping habits (although you can decide not to share transactional data), they'll be better able to target you with promotions. TechCrunch reports that CurrentC will even track health and medical data, though it's not clear what that means.

The bottom line is that blocking Apple Pay is anti-consumer. Shoppers should be able to decide what mobile payment solution they want to use. And while stores argue they should be able to choose which mobile payment solution to back, not allowing Apple Pay to be part of the mix is bad for competition.

As a result of Rite Aid's and CVS' actions, both Android and Apple users have banded together on Reddit in an attempt to boycott those businesses that block Apple Pay. That tells me something. When was the last time Android and iPhone owners agreed on anything? 

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Blocking Apple pay is also bad for the industry. It will slow the momentum of the first successful mobile payment solution just as it's starting to resonate with shoppers. But it won't stop Apple Pay. In fact, more and more consumers are going to be exposed to it every day without having to leave the house. There are a growing number of Apple Pay shopping apps that let you check out with a tap of your finger. This includes Target, which is supporting CurrentC for in-store payments. The more people who are exposed to Apple Pay, the more folks are going to ask for it elsewhere.

Rite Aid and CVS likely acted to block Apple Pay because of their business agreement with MCX. But these and other retailers will regret their decision not to be more inclusive of a solution that shoppers are already embracing. Why wait until 2015 for something that looks awkward when something more elegant works today?

If the Merchant Customer Exchange truly stands behind CurrentC, it should let it compete based on its own merits, not by preventing its main rival from even playing the game.

Mark Spoonauer is the editor in chief of Tom's Guide. Follow him at @mspoonauer. Follow Tom's Guide at @tomsguide, on Facebook and on Google+.