Both CVS and Rite Aid have disabled their NFC payment stations in thousands of stores across the United States.
What this means is that customers will no longer be able pay for their items using Apple Pay or Google Wallet.
"Please note that we do not accept Apple Pay at this time," said an internal memo from Rite Aid regarding Apple Pay. "However, we are currently working with a group of large retailers to develop a mobile wallet that allows for mobile payments attached to credit cards and bank accounts directly from a smart phone. We expect to have this feature available in the first half of 2015."
The mobile wallet service that the memo talks about is called Merchant Customer Exchange, or MCX and a number of retailers are on board with the new system. These include Wal-Mart, 7-Eleven, Banana Republic, Old Navy, Kohl's, Sears and more. Instead of using the NFC technology, MCX uses a new app that will be released next year that displays a QR code on the customer's smartphone at checkout. The app is called CurrentC.
Many merchants may support NFC payments, but that doesn't mean that the merchants themselves are on board with the system. Walgreens, for example, is listed as an official partner of Apple Pay while neither CVS nor Rite Aid was ever listed as such.
The battle for the mobile payments market has begun opening a rift between merchants and banks. Most banks have supported Apple Pay since the beginning, likely because it is a way to increase the number of people making purchases with their credit cards.
Not one bank, however, supports CurrentC, largely because the system is aimed at cutting out the middleman, which also means not having to pay credit card fees. The app, instead of using a plastic card, draws money directly from the user's bank account.
While we will not know whether or not CurrentC can compete with Apple Pay, many are suggesting that it doesn't stand a chance. Between now and then, however, it is likely that more retailers will follow in Rite Aid and CVS's footsteps and discontinue NFC support.
Apple, however, is likely not worried about the moves with more large retailers signing on as Apple Pay partners in the last week. Amazon has also announced that it will begin supporting Apple Pay payments. While some credit cards currently do not support the system, mostly co-branded cards, this is likely to change upcoming months.
