With Apple Inc. (NASDAQ:AAPL) aiming to tap the mobile payment industry with Apple Pay, merchant groups have joined hands against the system as CVS Health Corp (NYSE:CVS) and Rite Aid Corporation (NYSE:RAD) declined Apple Pay transactions. Both the merchants favored online payment system developed by Merchant Customer Exchange (MCX).
CVS Health Corp (NYSE:CVS) and Rite Aid Corporation (NYSE:RAD) are among the primary merchants in the U.S. equipped with the technology to support Apple Pay. Apple Pay is the latest offering from the iPhone maker that enables its users to make payments at merchant stores by waving their Smartphone. Both of these drug retailers have more than 12,000 stores in the country.
According to Anindya Ghose, New York University Professor,
“This act by CVS and Rite Aid heralds the advent of the imminent battle in the mobile pay system.”
Merchant Customer Exchange is said to be working on a payment solution called CurrentC, which would use QR code technology instead of near-field communications used by Apple Inc. (NASDAQ:AAPL). CurrentC would help merchants to get around credit card companies, although customers would have to connect their bank accounts to the CurrentC system.
MCX poses a major challenge in front of the iPhone maker considering its strong member’s profile including Wal-Mart Stores Inc. (NYSE: WMT), Best Buy Co. Inc. (NYSE: BBY), Target Corp. (NYSE: TGT), Sears Holdings Corp. (NASDAQ: SHLD), and Darden Restaurants Inc. (NYSE: DRI).
As per the report from Forrester Research Inc., the mobile payment market is likely to reach up to $90 billion in 2017 as compared with its $12.8 billion market in 2012. Apple Inc. (NASDAQ:AAPL) is pushing to tap this market and developing a complete ecosystem for its users. The iPhone maker has collaborated with major credit card issuers including Visa Inc (NYSE:V), Mastercard Inc (NYSE:MA), and American Express Company (NYSE:AXP) for Apple Pay.
With companies like CVS Health Corp (NYSE:CVS) and Rite Aid Corporation (NYSE:RAD) rejecting Apple Pay, the competition is likely to go fierce for the iPad maker.
This article has been written by Prakash Pandey.