Apple Pay and CurrentC

For a long time merchants have been paying a lot of fees to credit card companies and they don’t like it. So they started their own payment initiative, called CurrentC, that gives them the ability to cut credit cards out of the loop and provide them more data about their customers. Then Apple unleashed Apple Pay on the world, creating something much more secure and easier than anything CurrentC could do but which still leaves merchants paying credit card companies. Rich Mogull does a good job of explaining the details at TidBITS

The stage is set. Hijinks shall ensue. I bet the CurrentC backers had no idea how much nerd-attention they were going to get when all of this started.

To me, the most interesting element of this looming dispute between mega-corporations is how clear the battle lines are. Apple Pay uses existing credit cards but adds a lot of security (with one-time transaction numbers) and a bit of convenience. CurrentC is more clunky (QR codes!) and cuts out the credit card companies and, to a lesser extent, Apple. CurrentC collects helps build a customer profile which is great for merchants and creepy for consumers. In terms of security, CurrentC doesn’t use one-time number but instead stores your existing ATM card number or relies upon you charging up your account with merchants. So the three biggest pieces affecting consumer experience are security, data collection, and convenience. Apple Pay wins all three. (However I could see Apple incorporating loyalty program numbers and customer tracking numbers into Apple Pay at some point.)

CurrentC feels like something that solves the merchants’ problems at the expense of their customers’ convenience and security. I understand CurrentC’s point that if merchants could stop paying credit card fees, they could lower prices but that is not enough for me to have to deal with QR codes and continued security problems. I also have to wonder if they actually would lower prices or then explain that they need the money they used to pay credit card companies to now maintain CurrentC.

Wearing my consumer hat, I can tell you the deciding factor for me is security. Merchants like Target and Home Depot have proven they are not capable of protecting my credit card information. I have one credit card. I’m now on my fourth number for that account this year. Apple Pay solves that entire problem. When choosing where to shop, merchants that will accept my secure Apple Pay one-time number will go to the top of the line.