While the arrival of Apple Pay last Monday was heralded by a coterie of retailers such as Bloomingdale’s, McDonald’s and Whole Foods, two of the nation’s largest drug store chains promptly shuttered the service over the weekend -- providing a glimpse into a competing contactless payment system currently in the works, which is rumored for launch early next year.
CVS and Rite Aid, analysts noted, are members of a group of roughly 50 retailers called the Merchant Customer Exchange (MCX), which is creating technology that would enable consumers to purchase goods by scanning a QR code with their smartphones rather than by swiping a credit card.
Led by Walmart, other participants include Best Buy, Dunkin’ Donuts, Gap, Lowe’s, Target and more -- comprising 110,000 total locations that process over $1 trillion in annual sales.
Rite Aid and CVS were not listed as Apple Pay partners at launch, but Apple noted that the service would function within the roughly 220,000 stores that had already enabled near field communication (NFC) contactless payment technology. Rite Aid and CVS have since turned off their NFC capabilities -- though it remains to be seen whether other MCX members intend to do the same. MCX did not immediately respond to request for comment.
Walmart, which has never had NFC technology within its North American stores, has stated since the launch of Apple Pay that it will not be participating, a spokesperson said.
Apple Pay vs. MCX
In terms of technology and use, Apple Pay and MCX count several major differences.
With Apple Pay, users simply hold their latest generation iPhones near an NFC reader and tap the Touch ID button. Apple says that no credit card numbers are stored on users’ devices or on its servers, and noted that it doesn’t track users’ purchase histories.
MCX, on the other hand, operates with an app called CurrentC, which enables smartphones to scan QR codes displayed on cashier screens (or vice versa.) Unlike Apple Pay, CurrentC collects financial information as well as health and medical data.
MCX has a leg up on Apple Pay, notes Techcrunch, in that it can automatically apply consumers’ coupons, discounts and loyalty programs -- whereas Apple Pay users must still swipe these materials separately. MCX participants could also theoretically band together to offer cross-retailer promotions for another competitive advantage. CurrentC will also likely be compatible with older phones when it launches next year, whereas Apple Pay requires an iPhone 6 or 6 Plus.
However, Apple Pay trumps MCX in ease of use, Techcrunch writes, in that CurrentC seems to have been spearheaded by Walmart as a way to evade the skyscraping credit card processing fees it faces rather than as a convenience tool for consumers. The pay process itself is fairly clunky in that users must open their phones, launch the app, scan the code and wait for confirmation.
According to early accounts of Apple Pay, on the other hand, the experience appears to be fairly seamless.