Unless youve been completely sequestered away from technology news as well as mainstream news, you probably have heard of the new Apple iPhone 6 and 6 Plus as well as Apples new point of sale ecosystem called Apple Pay.
Soon after the launch of Apple Pay a number of retailers blocked Apple Pay and Google Wallet on their point of sale terminals.
This started with CVS and Rite Aid and then extended to 7-11, Kohls, Lowes, Gap, Dunkin Donuts, Sams Club, Sears, Kmart, Bed, Bath & Beyond, Banana Republic, Stop & Shop, Wendys along with a number of major gas stations. One of the reasons may be that many of these companies are part of the Merchant Customer Exchange (MCX), a merchant-owned mobile commerce network thats set to launch a rival payment system next year called CurrentC. This system does not use NFC, but QR codes to be scanned by the mobile device at check-out time.
Consumers tend to gravitate towards solutions that offer security, ease of use and privacy. CurrentC, in my opinion, is challenged in all three areas. Weve seen this before with mobile messaging thats why there are now a variety of messaging options besides SMS like WhatsApp, Kik, as well as SMS-enabled OTT messaging apps like Pinger, TextMe and others. In the mobile economy, consumers ultimately decide what is adopted.
The actions taken by MCX member companies have riled a lot of NFC users who were just fine with NFC-based contactless payment options formerly supported by many of the MCX retailers. One of the reasons these retailers are taking a step backward is that NFC-based point of sale payment options provide the level of security needed to take steps to overcome the preponderance of retail hacking attacks we have seen over the last few months.
Apple Pay became available on October 20th, coinciding with the release of iOS 8.1. Apple Pay only works on the iPhone 6 and 6 Plus, and will also be compatible with Apple Watch when it rolls out in early 2015. Apple Pay is not the first point of sale mobile wallet to deploy. Google Wallet was launched in 2011 but has struggled to reach mainstream usage with consumers. What Google Wallet has done, however, is help to establish a number of point of sale terminals where you might see a little Wi-Fi symbol with a hand holding a device known as the contactless payment symbol.
In the U.S. we are still playing catch up with other markets such as Japan and Korea, where contactless payments are much more common. Still, despite the posturing by organizations like MCX or the inevitable competition between companies like Google and Apple the age for mobile point of sale purchasing has finally arrived.
William Dudley is Group Director of Global Product Strategy & Solutions for SAP Mobile Services.