If you’re like many merchants, you’re wondering how the new ApplePay and CurrentC mobile payment services will impact your point of sale. A look at both options, along with the advantages and disadvantages they present to retailers and restaurant operators, should provide some answers.
Launched by Apple this past fall, ApplePay harnesses near field communications (NFC) technology and works with the Apple iPhone 6 phone as well as mobile point of sale apps on iOS devices. iPhone 5, 5c, and 5s owners will be able to use it with Apple’s Apple Watch when that product is introduced in 2015.
ApplePay Pros:
1. Fast, easy payment acceptance. Consumers store credit card number(s) in the Passbook app on their iPhone. To make payments, they simply hold the device near an NFC reader at the point of sale, approving transactions via Apple’s Touch ID fingerprint scanner. Transactions are completed within a few seconds.
2. Increased security and privacy, possibly spurring consumer adoption. ApplePay eliminates physical credit cards, decreasing the likelihood of stolen credit card numbers. Additional security stems from Apple’s use of tokens or “device account numbers,” rather than real credit card numbers, to process transactions.Apple also doesn’t track shopper transactions or merchant point of sale data, and the device account numbers prevent retailers from seeing shoppers’ names and other details.
3. Reduced risk. Substituting device numbers and transaction-specific security codes for card details during payment processing means actual card numbers aren’t shared with merchants or transmitted with payments. This eliminates—or at least severely limits—data breach risk.
4.No extra fees. Merchants don’t pay a fee to Apple for including ApplePay in their point of sale toolbox.
ApplePay Cons:
1. Point of sale hardware requirements. NFC-enabled point of sale terminals must be installed in order to accept ApplePay. It’s an expensive proposition.
2. Lack of support for online transactions.
CurrentC is now being pilot-tested by the Merchant Customer Exchange (MCX), a Wal-Mart led consortium of more than 50 retailers that together operate more than 110,000 stores and process $1 trillion in annual payments. Rollout is slated for 2015. To pay with CurrentC, users open the CurrentC app on their phone, scan a QR code, and display a paycode to the cashier for approval.
CurrentC Pros:
1. Cost-effective entrée into the mobile market. Merchants needn’t add NFC capability to accept CurrentC because it works on existing point of sale systems. By some estimates, merchants save $100 to $150 for every NFC-enabled terminal they don’t install at the point of sale.
2. No software headaches. FIS Global serves as CurrentC’s processing backbone. Consequently, only a software update—not a special scanner—is required to read QR codes.
3. Easy customer engagement. This stems from features that allow users to automatically redeem exclusive offers and coupons and earn instant loyalty rewards and points, as well as from the ability to pay with checking accounts and store gift cards and select debit and credit cards.
4. Access to MCX bargaining power. Leveraging such power should eliminate excessive payment processing costs and inefficiencies.
CurrentC Cons:
1. Security concerns. CurrentC experienced a security breach when hackers reportedly accessed users’ email addresses. Security protocols include a four-digit passcode, a secure unique paycode attached to every purchase at the point of sale, and storage of information on an encrypted cloud rather than on users’ phones. However, some say merchants remain at high risk for data breaches.
2. Potential technology snafus. ApplePay benefits from Apple’s design and development expertise, which many say still surpasses that of any retailer or IT provider. This is not the case with CurrentC and may cause future technology-related obstacles.
ApplePay and CurrentC are both forces to be reckoned with. Understanding how each one works and the way it may impact the point of sale is essential to remaining competitive at a time when mobile payments loom large.
