It doesn’t bode well for a mobile payment system when it’s
hacked before it’s even rolled out to the general public, yet that’s exactly issue
facing CurrentC, a payment system backed by WalMart and a consortium of other
retailers known as the Merchant Customer Exchange (MCX). The members of MCX are
not accepting any other mobile payment system, including Apple Pay, though this
security breach will not help their cause. In an email to customers who signed
up for a beta version of the app, CurrentC informed participants that “…unauthorized
third parties obtained the email addresses of some of you.” While the hackers
were only able to obtain email addresses and nothing more, the incident can
only be seen as an embarrassment for the system and the retailers that are
supporting it, especially since the MCX made a concerted effort to highlight
the security features of CurrentC. Further compounding the problem, the breach
occurred in the wake of the introduction of Apple Pay, which is already drawing
rave reviews.
The idea behind CurrentC was to give retailers access to a
significant amount of data on customer shopping habits and to allow retailers
to bypass the major credit card companies by connecting directly to customers’
bank accounts, thus avoiding the 2-3% fees typically paid to credit card
companies. While this all sounds great in theory, CurrentC has some inherent
flaws that may make acceptance of Apple Pay an inevitability for the MCX.
First, by only connecting to customers’ bank accounts, CurrentC essentially
serves as a debit card only and does not allow consumers to buy on credit, and
many consumers would much prefer to use a credit card for big ticket items such
as expensive electronics and high-end fashion items. Additionally, by not
allowing customers to use credit cards, customers would miss out on earning
loyalty or cash back rewards on their credit card, providing a further
disincentive to use CurrentC. Given the challenges facing CurrentC, it may only
be a matter of time before the MCX is forced to accept Apple Pay.
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