Apple Sways Best Buy, a Major Merchant Holdout for Apple Pay
Apple has had a rough time signing major merchants to accept Apple Pay in stores, but it has finally won the support of Best Buy, a nationwide retailer that swore off Near Field Communication-based payments years ago.
Upon Apple Pay's launch, several major merchants stated they would not accept the NFC-based mobile wallet in their stores. That included Best Buy, which told The Wall Street Journal last year that it switched off its NFC readers back in 2011 because it did not want to deal with the cost of supporting them, and it had no plans to change its mind.
But the electronics chain has had a change of heart, according to Tim Cook, CEO of Apple.
"Best Buy, which has been a long time strong partner of ours, has just announced that it's now offering Apple Pay in-app and later this year will offer Apple Pay in all of their U.S. stores," Cook said April 27 during a conference call to discuss Apple's second-quarter earnings.
Best Buy was a longtime supporter of the Merchant Customer Exchange (MCX), a consortium of merchants developing its own mobile payment app called CurrentC. Some MCX merchants have taken a strong stance against Apple Pay, going so far as to stop accepting all NFC payment types in protest. When merchants sign up, MCX requires its merchants to offer CurrentC exclusively, though retailers can stop supporting MCX without penalty, MCX says on its website.
Best Buy will remain part of MCX, said Best Buy spokesman Jeff Shelman in an email, though he referred questions about MCX's policies to MCX. Best Buy's logo is still included among the MCX merchants listed on the consortium's homepage.
"Best Buy remains a strong MCX partner and supporter of the CurrentC initiative We understand and strongly support our merchant partners' quest to do whats best for their customers," said Scott Rankin, MCX's chief operating officer, in an email provided through MCX's public relations team. "As we have stated in past, we are of the firm belief that there need to be at least two to three major players within the mobile payments ecosystem for it to succeed. We remain steadfast and passionate about CurrentC, as well as completely focused on delivering the best mobile commerce solution for our merchant partners and for consumers."
MCX also said it was bound by confidentiality agreements with each merchant, adding MCX merchants agree to exclusivity, but these provisions are designed to expire and are limited in time and scope.
The update for in-app purchases went live today in the Apple App Store, according to a Best Buy press release.
David Heun contributed reporting for this story.