Drugstores CVS and Rite Aid Ditch Apple Pay as Payment Option

The Apple Pay system may be the latest in adds to the iPhone 6 and its future counterparts, but merchants aren’t yet biting on the up and coming technology – from Apple anyway. Nothing illustrates this as well as CVS Pharmacy and its latest move to stop accepting Apple Pay as a valid form of payment. And they are not the first.

The large retail pharmacy chain is adding itself to the list of these merchants refusing to accept Apple Pay altogether. Rite Aide added itself to the list last Thursday. While it isn’t entirely clear why both these drugstores have opted out, it appears to have something to do with a competing system retailers have been working on on their own over the last year.

This isn’t the first sign that Apple Pay is on the decline. While there are a number of merchants which signed on with Apple Pay, there are plenty of merchants who refused Apple Pay from the beginning. These included WalMart and Best Buy, both of which have been working with another company to create receiving mobile wallet solutions that could be used in retail stores.

Those companies and other big chains like Sears Holdings and Target, are working with a company called CurrentC, who has been on track to roll out its mobile solution in early 2015. CurrentC has been working with retailers since 2011 to make a compatible system.

What’s driving this force for a system that bypasses credit cards? Credit card fees. Most retailers are always looking to skim costs and something like CurrentC and Apple Pay do just that by avoiding merchant fees charged by Visa and Mastercard.

This should help merchants to adopt systems such as Apple Pay, but it may be a while as the Apple system has some expensive shortcomings.

For starters, Apple Pay adoptees will have to buy all new, compatible equipment to use the system. This is because the Apple system works exclusively off the NFC chip. Apple Pay has also not been out for “real world” testing yet. With CurrentC’s launch on the brink, Apple is behind the curve.

The CurrentC system does not require such an expensive upgrade. Big retailers like the lack of a hefty upgrade price tag on their terminal systems. Retailers are not in the mind set that they will only have one system, yet. Some may have signed non-compete contracts with CurrentC, which may attribute to their claims that they are not readily adopting Apple’s system.

However, we all know that Apple has a lot of consumer pull and the Apple users won’t stand for big retailers telling them their Apple phones can’t be used in this manner. So, the battle has been set and the world will have to wait to see who wins the war.

(Photo courtesy of S Jones)