Retailers in the thick of mobile payment fight

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NEW YORK — A battle over the future of mobile payment is playing out at the nation’s leading drug chains.

Walgreen Co. is among the retailers that allow customers to pay for their purchases with their new iPhones, while CVS/pharmacy and Rite Aid Corp. are among the chains that have rejected the new Apple Pay system.

What’s at stake for retailers, beyond offering convenience to their more cutting-edge customers, could include access to a potential goldmine of ­consumer spending data as well as a means of avoiding millions of dollars in transaction fees.

Analysts contend that CVS and Rite Aid have disabled their acceptance of Apple Pay and a rival system, Google Wallet, in order to support another system — called CurrentC — that is under development by the Merchant Customer Exchange (MCX), a consortium of retailers whose members include Walmart, Target Corp., Sears Holdings Corp., Best Buy Co. and Gap Inc.

CurrentC, in testing now and expected to go live next year, will work on a wider variety of phones, including those without an NFC (near field communication) chip, as well as on more retailer hardware. It can be integrated with a retailer’s shopper loyalty program and its promotions, potentially making it a source of valuable shopper data.

Experts point out that the system also has the potential to cut credit card companies out of debit card transactions by linking directly with consumers’ own bank accounts.

MCX’s promotional materials say that CurrentC will also provide a more secure payment experience by storing users’ sensitive financial information in its cloud vault rather than locally on the mobile device.

“Furthermore, the application uses a token placeholder to facilitate transactions instead of constantly passing the data between the user, merchant and financial institution,” the organization says in a statement promoting the technology. “These innovative approaches to security are only a sample of industry-leading tools used by CurrentC to create a comprehensive, layered approach to information security.”

The system did experience a minor breech last month, however, when hackers were able to obtain the e-mail addresses (but not more sensitive information) of some participants in the CurrentC pilot program. The CurrentC app itself was not affected, according to MCX.

Some analysts believe Apple Pay will have the edge as consumers embrace paying for purchases with their phones, in part because Apple has a record of bringing new technologies into the mainstream.

Walgreens and Whole Foods Market Inc. were among the first retailers to accept Apple Pay, citing its convenience, security and ease of use.

“Customer experience is top of mind for Walgreens, and Apple Pay provides more flexibility for customers to use their payment of choice,” says Alex Gourlay, president of customer experience for Walgreens. “Incorporating the latest mobile technology into our business is another way we are offering ultimate convenience for our customers.”


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