Apple Pay rival hacked before it even launches, CurrentC admits
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A mobile payment service backed by Wal-Mart, Best Buy and other leading retailers is defending its practice of prohibiting its members from accepting alternatives such as Apple Pay.
However, Merchant Customer Exchange shopped short of giving a reason for requiring exclusivity.
The rivalry is heating up as more Americans choose to shop and spend time on their mobile devices.
Eddy Cue, Apple Senior Vice President of Internet Software and Services, demonstrates the new Apple Pay mobile payment system at a Whole Foods store in Cupertino. A consortium of retailers called Merchant Customer Exchange plans to offer a rival mobile payment system next year.
But officials say retailers may choose to leave without penalty, so they could accept those alternatives, which are based on a wireless technology called near-field communication, or NFC.
CVS and Rite Aid this week joined a long list of the world's largest retailers who will not be accepting Apple Pay.
At its launch, Apple boasted there are 200,000 retail stores now ready and willing to let you give them your cash using just a flick of your iPhone and a tap of your finger to prove your identity.
But retail giants Walmart, Target, Kohl's. Dunkin' Donuts are not among them.
These retail giants and dozens more are part of a group developing their own mobile payment scheme.
'Merchants make their own choices about their commitment to MCX and make their own choices about other forms of payment,' said Dekkers Davidson, the group's CEO.
However, an MCX blog post earlier said that when merchants choose MCX, 'they choose to do so exclusively.'
MCX is testing its CurrentC system and plans to launch it in 2015.
The service has garnered criticism as some of the group's biggest members, including CVS, 7-Eleven, Best Buy and Wal-Mart, are refusing NFC payments even though their stores have the equipment.
MCX was also the target of a hack.
In Wednesday's call, MCX said a small number of email addresses were obtained in a breach, but no other identifying information or any financial information was obtained.
The CurrentC app itself was not affected, and the organization has contacted everyone whose email address was affected.
The Apple Pay service can store Visa, MasterCard and American Express credit card information. Apple said shops like Macy's and Bloomingdales, drugstores including Walgreen's and Duane Reade, and other stores including McDonald's, Staples, Subway and Whole Foods are participating in Apple Pay.
When Apple Pay launched on Oct. 20, retailer resistance had been expected because Apple hasn't offered incentives to install new point-of-sale terminals and train staff on its new mobile payment system.
But this week it became clear that many large retailers declined to accept Apple Pay because they were part of MCX, which requires exclusivity.
On Monday, Apple CEO Tim Cook said Apple Pay had over 1 million activations in the first three days after it became available and is now more widely used than any competing payment system.
He called the dispute with retailers a 'skirmish.'
Drugstore chains CVS and Rite Aid both last week stopped customers using the new service which lets users pay for goods by holding a smartphone close to a specially designed terminal.
But Mr Cook said there were plenty of other retailers around the world signing up, claiming Apple Pay already totes up more transactions than all other 'contactless' payment methods combined.
Davidson said it was 'entirely possible' that in the future merchants can accept both MCX and the other forms of mobile payments, although did not give a timeline for when that might occur.
CurrentC lets users pay through a checking account, a store-brand card or a gift card, in addition to regular credit and debit cards.
In that sense, it is different than Apple Pay, which lets users pay only through credit and debit cards.
Merchants save transaction fees when customers use something other than a credit or debit card.
Davidson said MCX was in talks with other 'substantial financial institutions' and said 'over time we expect all cards will be welcome at CurrentC.'
Officials said that MCX, which uses barcode technology, also might expand to include NFC, which Apple Pay uses, if it deems that necessary in the future.
SO WHERE CAN YOU USE APPLE PAY? 200,000 STORES AND COUNTING
There are more than 200,000 payment terminals that should accept Apple Pay in the U.S.
Apple has announced about two dozen leading retail chains accepting Apple Pay at launch, and others are planning to do so by the end of the year.
Apple said it has worked with several retailers to make sure most of their stores, if not all of them, were ready at Monday's launch: Aeropostale, American Eagle Outfitters, Babies R Us, BJ's Wholesale Club, Bloomingdale's, Champs Sports, Chevron and Texaco retail stores including ExtraMile, Disney Store, Duane Reade, Footaction, Foot Locker, House of Hoops by Foot Locker, Kids Foot Locker, Lady Foot Locker, Macy's, McDonald's, Nike, Office Depot, Panera Bread, Petco, RadioShack, RUN by Foot Locker, SIX:02, Sports Authority, Subway, Toys R Us, Unleashed by Petco, Walgreens, Wegmans and Whole Foods Market.
Bright side: Dozens of retailers will be accepting Apple Pay, the biggest of which include Subway, Whole Fooods, Walgreens, McDonald's and Macy's
Apple also said that the following merchants plan to add support by the end of the year: Anthropologie, Free People, Sephora, Staples, Urban Outfitters and Walt Disney Parks and Resorts.
For online payments, Apple said the following merchants have apps ready for Apple Pay: Chairish, Fancy, Groupon, HotelTonight, Houzz, Instacart, Lyft, OpenTable, Panera Bread, Spring, Staples, Target and Uber.
Others expected by year's end include: Airbnb, Disney Store, Eventbrite, JackThreads, Levi's Stadium by VenueNext, Sephora, Starbucks, StubHub, Ticketmaster and Tickets.com.
Of course, Apple's retail stores and the Apple Store app will also take Apple Pay.
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