Apple Pay vs CurrentC(▼)(▲)
October 27, 2014
Dave Mark, writing for The Loop:
There’s a major battle brewing in the payments industry. On one side, Apple Pay sits on top of the existing credit card model, adding a layer of anonymizing security and ease of use.
On the other side is CurrentC, the brainchild of a consortium called the Merchant Customer Exchange, or MCX. CurrentC seeks to eliminate the credit card companies, and their fees, from the system. CurrentC is an alternative to credit cards, not an add-on.
CurrentC is a complete 180 from the direction Apple is going with Apple Pay. Rather than simplifying the experience of shopping around an already wildly popular payment medium (credit cards), CurrentC seeks to subvert the credit card by connecting directly to bank accounts. This requires customers to submit their bank account numbers as well as social security numbers and drivers licenses to verify their identities and connect their accounts before they can begin using CurrentC. Once this information has been submitted, it is stored in the cloud.
That's a stark contrast to Apple Pay, which only requires customers to enter information from a credit card, and if they want to use the same credit card that they likely already have tied to their iTunes account, it is retrieved automatically and they need only enter the CVV code to be up and running. Once their credit card is activated, the information is stored only in their iOS device's secure element and never uploaded to any cloud database.
The reasoning behind CurrentC is that it will allow retailers to avoid the small percentage fees that credit card companies place on each transaction. It will also allow them to more easily grant coupons and other deals to CurrentC customers by integrating them with the payment experience.
In terms of the experience of using each service, Apple Pay wins again:
With Apple Pay, you place your phone near an NFC sensor, then touch TouchID to validate the purchase. With CurrentC, you first have to unlock your phone, launch the CurrentC app, wait for it to generate a QR code which you place in front of the scanner. You then enter a pin code to complete the process.
The one advantage I can see that CurrentC could have is that it will work with existing systems while Apple Pay requires new technology to be added to stores, but CurrentC doesn't come out until 2015 anyway so as of now you can't use it anywhere.
The retailers in the MCE consortium include big names like CVS, Rite Aid, Walmart, Best Buy, and Target. (▼)(▲)CVS and Rite Aid made headlines last week when they began shutting off NFC terminals so that Apple Pay can't be used in their stores. MCE is fighting a ridiculous, losing battle, which harms no one more than consumers. As the rest of the industry moves toward more privacy, security, and ease of use, MCE is pulling in the opposite direction, and purely for their own benefit.