Why Apple Pay is Being Blocked by Some Retailers

New mobile apps that make it easier to pay from your phone are certainly gaining traction with several major companies, but some stores are arguing that they won’t accept money from programs like Apple Pay. For those individuals who had already been using funds from Apple Pay and similar programs like Google Wallet, it came as a surprise when, apparently overnight, certain stores no longer accepted their payment.

CVS and Rite AId

Part of the reason behind this sudden block to Apple Pay is a preference from certain locations, like CVS and Rite Aid, for another program known as CurrentC. This serves as an alternative payment system through mobile, but the stores get something out of the deal, too. There are more customers in the system to start with because CurrentC is open and can even be accesses on smartphones that don’t have NFC chips.

Stores can also tie deals for frequent customers into the CurrentC usage and avoid Apple’s fees or credit card transaction fees as well. The program relies on QR codes, so despite the fact that there are advantages especially from the store’s perspective, but QR codes do not always read the first time. This might lead a customer to wonder whether his or her card is being charged multiple times, but there’s also the headache of having to do multiple scans of the QR code (calling into mind the phrase “convenient store” itself). This can be a timely and frustrating measure especially when the purpose of these alternative measures is to boost security and increase speed, among other things.

Why Apple Pay is Being Blocked by Some Retailers

Leaders at Apple certainly have a few things to say about the sudden blocking of Apple Pay at drugstores. Last week, Apple CEO Tim Cook said that there are a multitude of other retailers who would sign up for Apple Pay compatibility, essentially saying “good riddance to bad rubbish”.

When Apple Pay launched recently, more than a million credit cards were signed up to the service in just the first few days it was available. When compared with “contact free” payment methods, Apple Pay is already leading the way despite its relatively brief time on the market. Despite the fact that Apple Pay is already quite popular, the alternative service program touted by CVS and Rite Aid is picking up steam, too. More than fifty chains, including mega-sellers like Best Buy and Wal-Mart, are working to integrate that rival system into their own mainframe.

It seems that avoiding credit card transaction fees is the primary motivation for retailers to consider CurrentC and other contact-free payment methods. For each transaction, those retailers have to cough up between 2 percent and 3 percent of the purchase price. Eliminating the middle man of the credit card companies could result in significant savings for retailers who are always conscious about their bottom line.