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Why Retailers Fear Apple Pay: CurrentC Vs. Apple pay

Many iPhone users might be disappointed that they can’t use their smartphone’s Apple Pay app in some of the biggest stores in America. Big retailers have announced that they will release their own smartphone app called CurrenC for processing payments through mobile devices, but it’s already known that it will lack Apple Pay’s speed, but it will facilitate retailers with access to customer data and additional revenue.

The reason retailers are afraid of Apple Pay is simple. Retailer’s preferred method of payment is cash, because for every transaction clients make with their credit the retailers profit margin decreases by 1.5% to 3%. Now, with the appearance of Apple Pay, they fear that the influence of credit card companies like Visa and MasterCard will increase, which in turn could lead to even higher losses of profit margin.

Those percentages may mean nothing if you are buying chewing gum, but for big retailers like Wal-Mart, with a profit of $119 billion, it’s big money. CurrentC will allow retailers to save up to 90% on every transaction through a mobile device, compared to Apple Pay.

The Merchant Customer Exchange, a consortium of retailers like CVS and Rite Aid, is developing the retailers’ app for mobile payments. CurrentC will run on the payment network “The Automated Clearinghouse”, while Apple Pay relies on credit card companies for processing payments.

The companies that are a part of the consortium have all ditched Apple Pay, but their main rivals were quick to adopt it, CVS’s main rival Walgreens already processes purchases with Apple Pay.

As for the customer data there are big differences between Apple Pay and CurrentC. When you purchase with Apple Pay, stores only get a payment token for every single purchase, instead of the credit card number. With CurrenC, retailers receive much desired data about who you are and what you buy.

Last week, the consortiums CEO, Dekkers Davidson, told reporters that its members couldn’t give up because they have invested significant time and money in the development of CurrentC.

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