Best Buy Adopts Apple Pay
By Brianna Ahearn, contributing writer
Apple has won another retailer over toward their payment system Apple Pay, even as CurrentC is still in the works. Tim Cook announced via a conference call that Best Buy would be accepting the payment option in both stores and on their mobile app, before the end of 2015. As best Buy is a member of the consortium MCX, the Merchant Custom Exchange, this is a big win, as MCX offers an Apple Pay alternative known as CurrentC. According to reports, Best Buy still has an allegiance to CurrentC. Best Buy made the announcement via press release on April 27. Per the press release, the Best Buy mobile app for iOS has been updated to use Apple Pay starting immediately, and existing users can download the update from the iTunes store. The press release also states that Apple Pay will be available in all Best Buy stores later this year; no definitive date has been announced.
“Today’s consumers have many different ways to spend their money and we want to give our customers as many options as possible in how they pay for goods and services at Best Buy,” states the retailer in the press release. Reports from USA Today and other outlets also state that Apple CEO Tim Cook shared the news on an earnings conference call the same day. Best Buy also mentioned that this summer, they would be opening a technology development center in Seattle to focus largely on mobile growth.
CurrentC has been in development since 2011, before Apple Pay's release, and was created by a group of major retailers as a way to avoid traditional credit card fees. The company has over 50 retail members including Walmart, who was behind the initial effort. The list of CurrentC companies represent a variety of consumer product and service categories. At this time, such companies include Sears, 7-Eleven, Publix, Wendy's, Southwest and more. The retailers of CurrentC operate a combined total of more than 10,000 stores, and would save significantly on credit card processing fees once active. CurrentC is a payment system based on QR codes that are scanned, and the system can also integrate loyalty cards, discounts, and other payment options to avoid transmitting data over the internet. The mobile app was released in September 2014.
In September 2014, Walmart and Best Buy explicitly and publicly announced they wouldn't be accepting Apple Pay at their stores. Rite Aid and CVS also blocked Apple Pay without a formal announcement, even after initially accepting the payment option, announcing “At this time, CVS/pharmacy cannot accept Apple Pay or other mobile payments that use NFC technology. We are in the process of evaluating mobile payment options for our customers.” Although reports denied that the consortium warned CVS and Rite Aid to take action, analysts said the decision was primarily because CurrentC had an exclusivity agreement that prohibited retailers from choosing Apple Pay after a certain period of months. The agreement imposed strict fines on retailers that defected to the competitor before the expiration date. The expiration date hasn't been released to the public, however, it seems that Best Buy is still moving forward with both CurrentC and Apple Pay. Best Buy has confirmed to Cnet that they're still a member of MCX.
One day after the Best Buy announcement, MCX announced their CEO, Dekkers Davidson, would be leaving to pursue other opportunities. Davidson had been the CEO since 2013 and will be replaced by interim CEO Brian Mooney. A spokesperson for MCX said the two events are unrelated.