Two new mobile-based payment methods, Apple Pay and CurrentC, are battling it out to see which company will win market share, according to the press. In a case of extraordinarily lucky timing, Apple Pay debuted this fall around the same time that its rival, CurrentC, was hacked. CurrentC got more attention — this time positive — after it was discovered that some of its merchants, namely Rite Aid and CVS, were not accepting Apple Pay.
Politics are one thing. Privacy, safety and ease of use are another. So based on that, who’s got the edge?
The basics: Apple Pay
Who’s behind it? Apple
How does it work? Use your iPhone 6 or, starting next year, your Apple Watch to pay for items in a store, or use your iPhone 6, iPad Air 2 or iPad Mini 3 to pay for items through apps. In-store payment is processed using near-field communication, or NFC, technology. An NFC antenna in the phone or watch communicates with an NFC antenna at the participating store’s register.
To pay in the store with an iPhone 6, you don’t have to open an app or turn on the display; just use the Touch ID feature by touching the face of the phone for identification. It vibrates and beeps when the transaction has been processed.
How is payment processed? Credit or debit card information is entered into the device manually or via the camera. The card number is assigned a device account number, or DAN, which is encrypted and stored on a chip dedicated to that purpose. When a transaction occurs, the DAN is used along with a code unique to that transaction. The actual card number and purchase information is not stored. If the phone is lost or stolen, it can be wiped clean, or Apple Pay can be suspended to prevent fraud.
What information is stored? Apple does not store any information; all customer data lives in the dedicated phone chip. Recent transactions are recorded in Apple’s Passbook feature so you can keep track of purchases.
Where can you use Apple Pay? Currently, you can use Apple Pay in stores that have NFC capability and accept Apple Pay, as well as through certain stores’ apps, which Apple says number in the “hundreds of thousands,” with more being added regularly. Current stores include McDonald’s, Panera Bread, Staples, Petco, Whole Foods and Walgreens.
Apple Pay works with Visa, MasterCard and American Express, and it is expected to strike a deal with Discover in the future. But don’t expect to use Apple Pay at CVS or other Merchant Customer Exchange retailers.
The basics: CurrentC
Who’s behind it? Merchant Customer Exchange, or MCX, a consortium of major U.S. retailers created expressly for the purpose of developing this payment system. Wal-Mart, CVS, Darden Restaurants, Lowe’s, Best Buy, Shell Oil, Sunoco, Target and Dunkin’ Donuts are some of the heavy hitters.
How does it work? Through an app that uses QR, or quick response, codes. Once you have the app on your phone, which you need a four-digit passcode to access, you open the app and either scan a QR code on the cashier’s screen or let the cashier scan a QR code on your screen. At the gas pump, a four-digit code is used instead. The system also links to your loyalty rewards accounts to make getting points and processing rewards easy.
How is payment processed? Rather than using credit or debit cards, CurrentC uses bank accounts. CurrentC was developed to eliminate credit card processing fees, which are estimated to total $30 billion in revenue for Visa and Mastercard each year. A token placeholder is used in the transaction, which then goes to the bank for processing.
What information is stored? Each transaction has a secure pay code associated with it. Unlike ApplePay, CurrentC can store a lot of information, including purchase details and location, in its “cloud vault.” The press release boasts that information is stored securely in the cloud, rather than on the phone as it is with Apple Pay. The app’s dashboard allows you to decide, within limits, what kind of information you want tracked.
Where can you use CurrentC? Nowhere as of now, since the app has not officially launched to the public. Only some people who have been invited by email are currently testing it. But when it does work, you can use it at 100,000 locations belonging to merchants who are part of the MCX.
The verdict
Surely there’s room in this world for more than one wallet-free, mobile-based payment method, but that hasn’t stopped nearly everyone from declaring a winner: Apple Pay. Forbes, Slate and TechCrunch all believe that Apple Pay is superior and will beat CurrentC.
Why? Is it just due to Apple’s sleek marketing, or is there something more behind it? Well, beyond the cool factor, there’s the safety aspect. Consumers don’t have much confidence in the cloud these days, so Apple’s method of using a fingerprint-protected device that doesn’t transmit or store sensitive information looks a lot better than CurrentC’s hardly ground-breaking use of QR codes and cloud storage. Apple wins in terms of ease of use, too.
And fundamentally, there’s the feeling that Apple Pay was created to make payment easier for the consumer, not the merchant. CurrentC, on the other hand, was created with the primary purpose of reducing credit card transaction fees for the merchant, not to make payment hassle-free for customers.
But while it may be lacking in user experience, safety and techiness, some sources, like IT World, have declared CurrentC the winner. If it does catch on, it will be through the sheer force of will of the big retailers who are dead set on ending credit card fees. In the end, that may be what gives CurrentC the edge.
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1 comment
Steve
To use CurrentC, here are the steps...
- Tell the cashier you would like to pay with CurrentC.
- Unlock phone.
- Start the CurrentC app.
- Hand phone to cashier.
- Scan cashier’s QR code.
- If scan doesn’t work, enter numeric code manually.
How to use Apple Pay:
- Hold iPhone to the reader while touching home button.
- Wait for the beep, after the first time using it stand their in disbelief having a conversation with yourself which goes something like "was that it?". If it's not your first time, there are no other steps, you might smile to yourself though ;-)
Customers will vote with their index fingers, retailers will ultimately give in to pressure from consumer demand. When was the last time you where in a supermarket and thought, "oh I better use my rewards card so this business can track me to make more money"? Need another good reason? MCX contains some of the same businesses, namely Target, who are the reason I had to replace my cards this year. I don't trust them to "securely store my information" they aren't in the software business like Apple, they are in the retail business. I don't trust them to hire as well as Apple would to get this right. I mean, just look at their user experience, if the best they can come up with is that convoluted and requires QR codes for security, why would anybody who gave it any thought give these cowboys their credit card information?