MOBILE WALLETS

This terrible CVS receipt shows why Apple Pay has little to fear from retailers

Obsession
How We Buy
Obsession
How We Buy

A photo I took of my CVS receipt—emblematic of bad product thinking—accidentally went viral on Twitter over the weekend.

It spoke to the low expectations for the new mobile payments app, called CurrentC, that two large US drugstore chains, Rite Aid and CVS, have signed onto. The two recently turned off support for mobile payments—namely Apple’s new Apple Pay service.

The reason, it seems, is about more than just not wanting to work with Apple: Both pharmacy chains are members of a new payments consortium called the Merchant Customer Exchange, which includes Walmart, the world’s largest retailer. The group, known as MCX, is now testing its CurrentC system, and expected to roll it out in 2015. As well as competing with other mobile payment systems, MCX trying to compete with the credit-card industry through its own commerce network.

While we generally applaud efforts to innovate and to circumnavigate middlemen, CurrentC seems unlikely to thrive, for two main reasons.

First, CurrentC—the product—seems to offer a lousy user experience that few will enjoy.

While Apple Pay is designed to make payments as easy as possible—by riding on existing payments infrastructure, with security and privacy in mind—using CurrentC actually looks harder than typical payment techniques. Because it’s designed to skirt the existing credit-card infrastructure, CurrentC’s current version only supports payments via checking accounts and certain store cards. And it comes with a questionable privacy requirement: To “confirm your identity,” CurrentC demands both your driver’s license number and social security number.

When it comes to actually paying, the system gets even more cumbersome. CurrentC describes the process on its support site: You need to select a “Pay with CurrentC” option on the register, activate your phone, open the CurrentC app, enter a four-digit passcode, press the “Pay” button, “either scan the Secure Paycode that the cashier presents (default) or press the Show button at the bottom of your screen to allow the cashier to scan your Secure Paycode,” select the account you want to pay with, and then press a “Pay Now” button.

For comparison, paying with Apple Pay is comically simple: Hold your iPhone—sleeping or awake—next to the store’s credit-card reader, touch your finger to your phone’s home button to verify your identity, and that’s it. As long-time Apple watcher John Gruber explains, “What Apple gets and what no one else in the industry does is that using your mobile device for payments will only work if it’s far easier and better than using a credit card.”

Second, this isn’t just a one-off slip—big retail is notorious for bad tech implementations and putting itself before its customers.

It is, of course, possible that CurrentC’s management will learn from its mistakes and improve its experience. Especially, if, say, Apple opens up the iPhone’s NFC chip—which it uses for contactless payments—to other app makers in the future. But the brick-and-mortar retail industry has few tech or user-experience successes to offer as proof that it’s going to get it right this time. (Witness its dispiriting collection of implementation failures in e-commerce, store design, previous mobile payment apps, or keeping our credit card numbers secure. Or just take yourself through the current checkout process in any large chain store.) Everything about MCX and CurrentC looks like it’s being instituted to make things better for retailers first and customers later.

To be sure, one retail chain has had some independent success with its own mobile payments service—Starbucks, which reported this summer that it has 12 million active users of its mobile app in the US and Canada and that mobile payments represent some 15% of transactions in its US company-owned stores. But Starbucks is an anomaly: It is excellent at technology, it has been for a long time, its app is great, and it has well-established loyalty and gift-card programs that it combined with its mobile payments product.

CurrentC also includes support for loyalty and coupon programs—something Apple Pay does not. But it’s not clear if participating retail chains will go all-in on CurrentC for their loyalty programs or simply offer it as an option—or even if their loyalty programs are lucrative enough to make the awkward technology worth using.

A Walmart representative demonstrates a Scan & Go mobile application on a smartphone at a Walmart store in San Jose, Calif., Thursday, Sept. 19, 2013. (AP Photo/Jeff Chiu)
Walmart’s previous mobile shopping app didn’t catch on. (AP Photo/Jeff Chiu)

Bigger picture, it’s still too early to call Apple Pay a success or CurrentC a failure. While mobile payments have been called “the future” for a long time, there still isn’t evidence that most people will prefer paying with their phones versus traditional, simple payment techniques such as cash or plastic.

But Apple is at least designing in the right direction. It’s hard to see the same thing with CurrentC—and it seems likely that many of its member retailers could eventually crawl back to more elegant mobile-payments schemes like Apple’s.

Read this next: The complete guide to Apple Pay

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