CVS, Rite Aid refusing to accept Apple Pay system, lend support to current CurrentC payment system

Call it a trade blockade of sorts, but you might not be able to use Apple Pay to purchase items at CVS or Rite Aid for a while.

Per the New York Times and 9to5Mac, Rite Aid has joined CVS in disabling Apple Pay as a payment method in its stores. Like CVS, Rite Aid is a member of the Merchant Customer eXchange (MCX) consortium promoting a rival mobile payment service, CurrentC.

Consumers are responding by threatening to boycott stores which disable Apple Pay, with more than 2,000 comments across several Reddit threads on the topic. Android users are joining in, as disabling NFC also blocks alternative mobile payment services offered by higher-end Android handsets.

As with CVS, Apple Pay initially worked in Rite Aid stores, indicating that the company has made a deliberate decision to switch off support.

While Apple has declined to comment, MasterCard said that it was the wrong decision.

“We think consumers should have the ability to pay any way they want,” said Ed McLaughlin, chief emerging payments officer at MasterCard.

“Rite Aid and CVS have been accepting contactless payments for quite a long time,” Mr. McLaughlin added. “We look forward to them turning the functionality back on in their stores.”

MCX members like the CurrentC system as it links direct to debit accounts, bypassing card companies and the transaction fees they levy. It also allows them to issue coupons and track purchasing behaviour.

For consumers, however, CurrentC is ridiculously clunky. It relies on either exchanging QR codes – the payment terminal displaying one which is scanned by the phone, and the phone generating a second one that is scanned by the terminal – or manually entering 4-digit codes. It is also far less secure, without the protection Apple Pay offers with single-use codes and Touch ID.

Apple CEO Tim Cook said that mobile payments had failed so far because they were built to serve the business models of their creators, rather than to provide a useful experience for customers.

The MCX consortium includes retailers such as Walmart, 7-Eleven, Sears, Wendy’s, Kmart, Banana Republic, Dunkin’ Donuts and most gas companies – but MasterCard is confident that Apple Pay will prevail.

“Apple Pay is the most convenient, most secure, and what’s best for consumers,” Mr. McLaughlin of MasterCard said. “That’s what will win out in the end.”

Stay tuned for additional details as they become available.