[Updated with MCX clarification] Rather than
disable its NFC-compatible terminals and stop taking Apple Pay (or Google Wallet, or Softcard) mobile payments after a period of compatibility, grocery chain Meijer has said it has
"no plans" to stop accepting NFC-compatible systems in its stores -- despite being a member of MCX's CurrentC program, which contractually bars competing systems. The CurrentC system, which does not formally begin until sometime next year, may try to impose fines as per its agreement with Meijers.
MCX executives have issued a series of
evasive, confusing and contradictory statements about how they may handle merchants in their system that also want to accepting competing mobile payment options. Legally, the MCX agreement for the CurrentC system can
impose fines on merchants that dare to accept alternative payments systems customers want to use other than the CurrentC program, which is not even yet operational. It's now clear that Rite-Aid and CVS disabled their NFC payment-taking ability in order to comply with their agreements with MCX.
Meijer will apparently be testing the claims of some MCX executives that merchants can choose to accept alternative payment systems like Apple Pay as well as CurrentC by not disabling its systems. Currently the chain accepts Apple Pay and Google Wallet and other NFC-compatible systems, reports
Michigan Live.
It has not been a good week for the CurrentC program, which found its initial trials
hacked (with some email addresses stolen) and wide criticism of its plan to pool and store customer buying and financial data in its own secure cloud system. By comparison, Apple Pay does not transmit users' financial data or buying information at all, using only secure one-time-use tokens to gain purchase approval from the card issuer. Card data is encrypted, and only stored locally on the users' device, and requires Touch ID to verify.
MCX, however, argues that storing customer data on the device itself is
less secure than cloud storage, saying that if the device were hacked or stolen the local data might be accessible by attackers -- as though the firm didn't understand that data on local devices can be encrypted. The CurrentC program has been designed from the ground up to be an ideological opposite of Apple Pay, with merchants collecting and pooling data about customers and their purchases.
The system is also designed to cut out the bank card issuers from their usual 2-3 percent fees on purchases, but will require customers to use the new system -- which involves taking a picture of a QR code with their device's camera and is not compatible with NFC -- if they want to use mobile device payments at CurrentC-accepting merchants. In exchange, CurrentC offers loyalty programs and coupons or promos for users of its system. Apple Pay current preserves existing loyalty or reward programs with its merchant partners. Apple has said that it expects merchants that don't accept Apple Pay presently to
come around in time, mostly due to
customer demand.
Meijer has over 200 stores around the US, and has expanded from its original grocery-store roots to offer gas gardens and items normally found in pharmacies and department stores in an effort to be "one-stop shop" for customers. Meijer executives have said that they do not expect to be penalized by MCX for their multi-system acceptance.
Update: MCX has told
Business Insider that merchants who accept other payment methods will have to
leave the CurrentC consortium, which will affect Meijer's position in the industry group. The magazine had sought clarification of the policy, since MCX executives could not provide clear answers to the question.
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