US pharmacy chains CVS and Rite Aid have stopped accepting payments from the just-launched Apple Pay system, possibly due to a competing digital wallet solution.
Both companies stopped accepting payments through Apple Pay less than a week after the system's launch, with Rite Aid stopping on Thursday, and CVS following suit on Saturday.
The reversal of position is likely due to competing mobile payment system CurrentC, which has yet to launch. CurrentC is being developed by Merchant Customer Exchange (MCX), which is owned by a partnership of multiple large retailers and merchants.
CurrentC's proposed digital wallet does not use an NFC chip, instead generating a QR code that is displayed on checkout terminals. Customers then scan the code using the CurrentC app, which pays the retailer from a linked bank account.
Among the large retailers partnered with MCX who are likely to adopt the system are Wal-Mart, Best Buy, Target and Sears, all of whom have not signed up with Apple Pay. One of the prime motivators for the stores is to avoid paying the credit card transaction fees currently charged by Visa, MasterCard and other financial companies, and adopting Apple Pay would simply replace one transaction fee with another. Lee Scott, former CEO of Wal-Mart, demonstrated the strength of feeling involved in the current mobile wallet scramble, reportedly saying "I don't know that MCX will succeed, and I don't care. As long as Visa suffers."