Apple says its new mobile payment system for the iPhone 6 and Apple Watch has 220,000 merchants ready to go when it launches in October, but that list doesn't include Walmart or Best Buy -- and it won't, because neither company has any interest in supporting Apple Pay. Without either on board, Apple Pay may have a more difficult time gaining traction and could find itself in the same place as Google with a mobile payment platform that few people use and many retailers resist.
Walmart disses Apple Pay
Apple Pay was unveiled during Apple's iPhone 6 and Apple Watch launch event earlier this week. It relies on the iPhone 6's Touch ID sensor, along with a new NFC chip, to handle transactions, and it requires merchants to have NFC-compatible readers in their stores. Customers simply hold their iPhone near the reader and the transaction is charged to their credit card.
NFC-based payment systems aren't new, and Apple isn't offering any serious innovation with Apple Pay, although the sheer volume of iPhones -- and soon Apple Watches -- could help push retailers into finally getting on board. Walmart, however, doesn't have any interest in signing on with Apple Pay, nor does Best Buy and many other retailers.
In some cases, like in Best Buy stores, NFC payment systems were in place but have been shut off because they're expensive and customers didn't use them, according to the Wall Street Journal. Adding NFC payment support to the iPhone 6 isn't swaying them into changing their minds, either.
Walmart and Best Buy instead have signed on for a merchant owned, instead of bank owned, cardless transaction system from Merchant Customer Exchange. The system, called CurrentC, links directly to customer's bank accounts, and uses a smartphone app that displays a QR code to process transactions. Target is also on board with CurrentC, but has committed to supporting Apple Pay, too, although only through its own iPhone app.
For stores that don't already have NFC readers in place, the cost of adding them may be a stumbling block. Readers are priced around the US$500 mark, and for stores that need more than one, the cost can add up quickly.
Without a retailer like Walmart backing Apple Pay, the NFC payment market in the United States as a whole could stay where it is today, stalled and rejected by merchants. With Apple on board, however, that could push more stores into accepting NFC payments should enough customers demand to be able to use the system.
Once Apple Pay rolls out this October, there may be a bigger push for NFC support in stores, bur right now that isn't happening. "The truth is, today, no one uses NFC," said CTO Chris Ciabarra from NFC reader supplier Revel Systems.
With little interest in NFC from consumers and ongoing resistance from retailers -- especially Walmart -- Apple Pay has an uphill battle ahead of it. The iPhone 6 will be a good tool in the fight to push NFC payements into the mainstream, but without the backing of the big name players in the retail market, it may not be enough. If not, Apple Pay could turn into the company's next Apple HiFi.