Apple suffered a major setback in its expansion plans for its mobile payment system with renowned drug stores CVS Health and Rite Aid declining to transact using this payment mode.
Apple, the renowned smartphone making company, has failed to gain the trust of two drug stores in the U.S. , which have rejected Apple Pay as a mode of payment. The new payment system by the Cupertino tech giant, lost support from CVS Health and Rite Aid. The drug stores, which already had the set up to take payments using the new iPhones, are reportedly making a shift to a new QR code based payment system.
The drug retailers withdrew support for Apple Pay last week in favor of a new system under the brand CurrentC by Merchant Customer Exchange (MCX), which is backed by Wal-Mart. While the details on the rival payment system are scanty, CurrentC is said to work by scanning the QR Code displayed on retailer's checkout terminal, Huffington Post reports. Customers can complete the transaction by scanning the unique code and it is said to support a wide range of smartphones.
The new move sets a roadblock in Apple's plans to expand its new payment system. CVS has nearly 7,700 retail drug stores and Rite Aid has about 4,570. In another setback to the tech giant, Apple has failed to get major retail chains like Wal-Mart and Best Buy to join the Apple Pay stream.
CVS and Rite Aid were not a part of the developing payment system by Apple when it was launched last month. But their set up to read short-range wireless signals enabled the support for Apple Pay. The drug retailers did not reveal the reason for the shutdown of Apple Pay but it is seen as a contractual move. MCX is expected to launch its latest mobile payment system during the first quarter next year, but the technology has been in the pipeline since 2011. The main aim behind the new payment system is to prevent the 2-3 percent transaction fees charged by Visa and MasterCard.
With Apple jumping into the arena, existing players including PayPal and Google are forced to up their ante on the new category. Apple has received a favorable report and support from consumers and retailers.
"Apple Pay is the most convenient, most secure, and what's best for consumers," McLaughlin of MasterCard told Boston Globe. "That's what will win out in the end."
