Competition is holding Apple Pay, mobile payments back

As two big drugstore chains decline to support Apple Pay, something is going to have to change for mobile payments to succeed.

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Apple Pay, the new mobile payment system for the iPhone 6, iPhone 6 Plus, and upcoming Apple Watch, promises to let you use your mobile device for purchases at a wide variety of retailers, from Macy’s to McDonald’s. But for any mobile payment system to truly succeed, much less actually replace your wallet, it needs to be usable just about everywhere.

New evidence surfaced last week showing that, despite an initial show of support for Apple Pay, competitive considerations are keeping many retailers from supporting someone else’s mobile payment scheme. Apple Pay was already competing with Google Wallet and other systems, but it appears that giant drugstore chains RiteAid and CVS have discontinued their informal support for Apple Pay because they’re members of the Merchant Customer Exchange (MCX), which plans to launch its own mobile payment app—CurrentC—next year, along with Walmart, Target, and Best Buy.

To be fair, neither RiteAid or CVS ever formally agreed to support Apple Pay or Google Wallet, but apparently the services were working at the chains until the companies cut them off without comment last week. And of course no retailer is obligated to support any of these systems if it doesn’t want to.

Universal access?

It’s no secret that the key to making mobile payments viable is to make them as universally accepted as possible. That means they should work on as many devices, in as many stores, for as many people as possible. Right now, it seems that all of the vested companies seem more interested in making mobile payments work on their devices, in their stores, for their customers.

That just isn’t going to get it done. Asking consumers to set up and deal with multiple systems, much less figure out which one—if any—works where is a one-way ticket to nowhere.

Can’t we all just get along?

Getting Apple and Google to agree on a single mobile payment system seems impossible from the get-go. And the MCX takes a completely different approach based on cutting the credit-card companies out of the equation to save on processing fees.

I don’t have a horse in this race, but I would like to see either a clear winner emerge or everyone agree to get along and support each other’s systems. I’d be happy to ditch my wallet for my smartphone. But it doesn’t make sense to make me choose where to buy a tube of toothpaste based on what kind of smartphone I carry.

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