CVS joins Rite Aid in refusing NFC payments

Battle lines are being drawn in the fight for a slice of consumer spending

It's been around only a week, but Apple Pay is already making waves in the mobile payments field. On Monday, major drugstore chain CVS joined rival Rite Aid in disabling the NFC (near-field communication) payment function on in-store terminals.

In doing so, the retailers are forcing Apple Pay users to reach into their wallets for cash or a payment card (or take their business elsewhere).

CVS hasn't commented on the decision and Rite Aid had nothing to say until late Friday, when it issued the briefest of statements.

"Rite Aid does not currently accept Apple Pay. We are continually evaluating various forms of mobile payment technologies, and are committed to offering convenient, reliable and secure payment methods that meet the needs of our customers," it said.

MasterCard said it was "disappointed that both Rite Aid and CVS have decided to block their customers from using the payment method of their choice," but it's unclear if the card network can do anything about it.

On Friday, a source at MasterCard said the organization was looking into whether Rite Aid's disabling of NFC contravenes retailer card acceptance guidelines. However, Visa said the action didn't break its retailer agreement.

Stores can choose whether to accept Visa credit and/or debit cards. They cannot discriminate against cards issued by certain banks, but acceptance of NFC payments or chip-and-PIN is solely at the discretion of the retailer, said Visa.

While CVS and Rite Aid haven't explained their motives, both are partners in a yet-to-be-launched rival payment system called CurrentC.

Unlike Apple Pay and Google Wallet, CurrentC is controlled by the retailers themselves and appears to be a move to break away from card-based payments and networks. As advertised, CurrentC will have users create an account and then show a barcode generated by their mobile phone to a cashier, who will then scan the barcode to initiate a transaction.

The barcode payment method isn't as elegant as Apple Pay, which only requires the user hold a phone over a payment terminal while keeping their thumb on the phone's fingerprint reader. It is also yet to launch. CurrentC is due in the first half of 2015.

The company developing CurrentC, Merchant Customer Exchange, did not return requests for comment.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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Martyn Williams

IDG News Service
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