A week with Apple Pay

29 Oct 2014 | Author: | No comments yet »

Apple Pay Rival CurrentC Hacked During Test of Payment System.

Even before Apple Pay was announced, a coalition of retailers refused to accept it in their stores. “Within the last 36 hours, we learned that unauthorized third parties obtained the e-mail addresses of some of our CurrentC pilot program participants and individuals who had expressed interest in the app,” Linda Walsh, a spokeswoman for Merchant Customer Exchange, told ABC News in a statement.A mobile payment program supported by more than 50 national retailers has been breached, according to an e-mail sent to people testing the product, in what could be a setback for what the merchants hope will be an alternative to Apple Pay.

A worker uses Apple Pay inside a mobile kiosk sponsored by Visa and Wells Fargo set up to demonstrate the new Apple Inc. mobile payment system in San Francisco. The mobile payments solution was quietly announced in September, but was thrust into the spotlight earlier this week when it was reported that some retailers involved in the development of CurrentC had taken measures to disable or alter their NFC readers so Apple Pay, a competitor, cannot be used. MCX spokeswoman Linda Walsh said many of the email addresses were for dummy accounts, but the breach comes at a sensitive time, when retailers are already under scrutiny for a string of security lapses and Apple AAPL, -0.01% is rolling out its new system, Apple Pay, which promises to be harder to hack. Over the last few days, Rite Aid and CVS have stopped accepting Apple Pay because they, along with Walmart, Best Buy and other retailers, exclusively support CurrentC under the e (MCX).

The Needham, Mass.-based company is currently beta testing its main product, CurrentC, which will allow users to pay at physical retail stores with their phones. “MCX is continuing to investigate this situation and will provide updates as necessary,” read part of company’s email to customers. “We take the security of your information extremely seriously, apologize for any inconvenience and thank you for your support of CurrentC.” They see the mobile wallet as a way to help retailers understand more about their customers’ shopping habits and, potentially, let merchants avoid the high fees they pay when processing credit card transactions. But they are working on building a competitor, CurrentC, a mobile wallet app that will connect directly to customers’ bank accounts or store-specific credit card. MCX may see “limited information” on prescription purchases, such as location and transaction amount, but will “adhere to strict rules regarding the privacy of consumers’ information.” CurrentC will store financial information in a cloud vault, according to a release detailing the service. The problem is that under the terms of their MCX contractual agreement, they are not supposed to accept competing mobile payments products like Apple Pay, according to multiple retailers involved with MCX, who spoke on the condition of anonymity.

At stake is the future of how consumers choose to pay for things, with technology companies, credit card businesses and retailers all fighting for a piece of what may become a $90-billion mobile payments market, according to projections from Forrester. And if Apple Pay catches on, consumers may not be interested in a competing product. “These retailers are in a real jam,” said Karen Webster, chief executive of Market Platform Dynamics, a payments industry consulting firm. “The last thing merchants want is ticking off their consumers over payment,” Webster said. an effort by merchants to build their ideal mobile wallet. If retailers had access to this data, it could be used to deliver relevant deals and loyalty points to consumers, which could increase these companies’ bottom lines. That could also amount to in-store experiences centered on the smartphone, an area in which Walmart, one of the biggest partners in MCX, has increasingly dabbled in recent years. And while many industry experts expect mobile payments to rise over the next five years, there is no guarantee that consumers will find mobile wallets any more convenient than paying with cash or a credit card.

PayPal’s mobile wallet options have failed Still, many say they believe that if any company is able to widely influence consumer behaviour, it’s Apple. And if that is the case, MCX may have picked the wrong mobile wallet to back. “When these contracts were signed several years ago, no one knew about Apple Pay, or what mobile wallets were going to look like,” Webster said. “It just didn’t have the same sort of consumer froth around it.”

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