The announcement and subsequent release of Apple’s payment system, Apple Pay, into the retail space has been met with at least early success – CEO Tim Cook said this week one million cards were registered on the system within the first 72 hours.

With Apple introducing its own payment method, and Android users happily exploring their own options, the industry has assumed fragmentation within this space will erode and only a few main players will be left. For retailers, certainly, less fragmentation would be welcome.

However, the CurrentC joint venture has thrown down a roadblock. Several retailers including WalMart and 7-11 in the United States have focused their attention on this alternative system, and have blocked the use of NFC readers in their physical outlets.

Merchant Customer Exchange, the group behind CurrentC, has told Business Insider the issue, at heart, is security and ease of access:

“There are certainly a lot of compelling technologies being developed, which is great for the mobile-commerce industry as a whole. Ultimately, what matters is that consumers have a payment option that is widely accepted, secure and developed with their best interests in mind.

“MCX member merchants already collectively serve a majority of Americans every day. MCX’s members believe merchants are in the best position to provide a mobile solution because of their deep insights into their customers’ shopping and buying experiences.”

While CurrentC is favoured by several merchants due to erasing credit card transaction fees – the system works by scanning QR codes – consumer take-up is the harder goal. The system requires users to be verified through a driver’s license number and their banking details.

Multiple users on forums have expressed disappointment in the choice to disable NFC readers, as this blocks both Apple Pay and Google Wallet from working.

While a winner in the mobile payments space is yet to emerge, blocking out significant amounts of the mobile consumer base is a bold move. It remains to be seen whether this type of strategy will work even in the short-term. Considering consumers are already on-edge when it comes to how their data is treated, handing over personal details including banking numbers may be too far a reach for many.

The other problem to consider is QR codes, which outside marketing have not experienced a large take-up among consumers. While barcode scanners have been relatively popular, the security around QR codes has been less tested. While consumers, especially in Australia, are growing used to the idea of contactless payments, scanning QR codes as a form of payment is a different method that will require a large educational campaign to succeed at scale.

For now, it appears the mobile payments space, while growing smaller, still lacks a clear leader.



John Riccio

John is PwC’s Global Design & Deploy, Experience Consulting partner.

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