Wonder why Walmart, CVS, Rite Aid and other retail giants said no to Apple Pay? Here's why


Just a week after Apple Pay's launch, retailer Walmart, pharmacies CVS and Rite Aid and other retailers including Best Buy, Home Depot and Dunkin' Donuts decided to pull out support for all NFC-enabled mobile payment platforms, including Apple Pay, Google Wallet and Softcard.

CVS has declined to issue an explanation, but Walmart has released a statement to Business Insider saying it is more concerned about providing support for a system that is "widely accepted" and provides "deep insights into their customers' shopping and buying experiences."

"Ultimately, what matters is that consumers have a payment option that is widely accepted, secure and developed with their best interests in mind," says Walmart .

Rite Aid, on the other hand, says it is currently assessing the mobile payments industry to determine the best option for its customers.

"We are continually evaluating various forms of mobile payment technologies," says Rite Aid spokesperson Ashley Flower. "And we are committed to offering convenient, reliable and secure payment methods that meet the needs of our customers."

However, analysts believe the retailers are not speaking of the whole picture. Walmart, CVS and RiteAid are all part of the Merchant Customer Exchange (MCX), a consortium of big-name merchants the likes of 7Eleven, Sears and Target, which is currently developing its own mobile payment system dubbed CurrentC.

Unlike Apple Pay, which relies on tokenization to send an un-hackable, one-time security code for every single transaction so that Apple or other parties have no access to any information about the transaction, CurrentC works by requiring users to scan a QR code that sends information right into the hands of merchants. Moreover, while Apple Pay works with Visa, MasterCard and American Express, CurrentC removes the need for credit cards altogether, thus also eliminating the two percent transaction fee that merchants are required to pay the credit card networks.

CurrentC is still in development and will not be around until 2015. This means users shopping at these retail stores will have to revert back to the less secure magnetic swipe credit cards that Apple Pay and chip-and-PIN credit cards are hoping to eliminate.

"Clearly, Rite Aid and CVS are making a business decision over a customer satisfaction decision," says analyst Patrick Moorhead, president of Moor Insights & Strategy.

Moorhead says that disabling support for Apple Pay is not good for consumers, who have taken to Twitter to complain about the move. Apple Pay is the first mobile payment system to make it fast, easy and seamless for buyers, who simply have to touch their NFC-enabled iPhone 6 to the point-of-sale terminal and confirm their payment by moving their thumb over the Touch ID fingerprint sensor.

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