CurrentC

[imoldernu]

A heads up on looking at the ramifications of the emerging battle between Apple Pay and CurrentC.
MCX for info http://www.mcx.com/

(note the companies involved)
Thinking about what will be affected in the day to day handling of money, and the effect on the Credit Card industry and the Banks.

Instead of linking to a particular news article, some poking around different news and websites might be a better intro to the concept, and what it could mean to the consumer.
http://www.unfaircreditcardfees.com/
.. and members:
http://www.theverge.com/2014/10/25/7069863/retailers-are-disabling-nfc-readers-to-shut-out-apple-pay

The notion of a widespread payment system controlled by retailers and free of credit card processing fees is very appealing to merchants. It should come as no surprise, then, that, in addition to Wal-Mart, the largest retailer in the world, CurrentC's partners include Gap, Old Navy, 7-Eleven, Kohls, Lowes, Dunkin' Donuts, Sam's Club, Sears, Kmart, Bed, Bath & Beyond, Banana Republic, Stop & Shop, and Wendy's — as well nearly all the major US gas station chains — among its ranks.

While what we pay in hidden fees for convenience may seem small, it supports many of the major institutions. What do you see as long term consequences?

 

[Sarah in SC]

I am also interested in how this might play out. As of now, the CurrentC seems very clunky for consumers, and only really benefits the stores. I haven't tried out the ApplePay I loaded on my new phone, but probably will soon. I guess I just don't see hauling my credit card out of my wallet as particularly inconvenient. But if I had to unlock my phone, open an app, and then scan a QR code like CurrentC requires, I'd definitely consider that to be much harder.


Sent from my iPhone using Early Retirement Forum

 

[photoguy]

Jonathan Gruber has an interesting take on this dispute:

Daring Fireball: Retailers Are Disabling NFC to Block Apple Pay

Think about what they’re doing. They’re turning off NFC payment systems — the whole thing — only because people were actually using them with Apple Pay. Apple Pay works so well that it even works with non-partner systems. These things have been installed for years and so few people used them, apparently, that these retailers would rather block everyone than allow Apple Pay to continue working. I can’t imagine a better validation of Apple Pay’s appeal.

And the reason they don’t want to allow Apple Pay is because Apple Pay doesn’t give them any personal information about the customer. It’s not about security — Apple Pay is far more secure than any credit/debit card system in the U.S. It’s not about money — Apple’s tiny slice of the transaction comes from the banks, not the merchants. It’s about data.

 

[M Paquette]

I'll just note that on the 'battleground' between Apple Pay and CurrentC, that many vendors support both payment methods.

The Verifone, Pax, and Ingenico Near Field Commiunications (NFC) terminals all handle Apple Pay (and NFC equipped cards, of course) just fine. Apple Pay is just an NFC card that happens to provide a one-time-use card number, like VISA ShopSafe and similar services do for safe online shopping.

CVS and RiteAid have disabled all NFC terminal functions to try and block Apple Pay. When CurrentC rolls out, they'll have to leave NFC turned off, and require you to present a QR Code from the store's app for scanning by the cashier, or scan a QR code with your smartphone and a custom app.

An unchanging QR code, like a simple credit card number, can readily be stolen from a merchant's point-of-sale network using the same methods currently used to steal credit card numbers. One possible implementation uses an electronically generated and displayed QR code to avoid this.

Scanning the QR code into a phone and using that to initiate a transaction may be a bit more secure (until a clever thief hacks the network to slap their own QR code up). They may also offer a numeric code to be keyed into your phone if the camera recognition path doesn't work. (That'll be fast...)

In either case, a unique electronic token is generated to represent the transaction and charge the user.

The back end of CurrentC avoids the high credit card fees charged to merchants by directly tying into ACH transactions, electronic drafts directly from your checking account that bypass the card networks. An ACH transaction uses the same mechanism as electronic check processing. Your checking account information would be stored with
Paydiant.

One feature of the MCX/CurrentC network that the merchants like is having their own app on your smartphone, with all the precise tracking and targeting that comes along with that. (Yes, EVERY merchant will have their own app, with all the goodies that go along with that. Tracking, beacons, push coupons,and other battery suckers.) Apple Pay, as a consumer-oriented system, is less appealing to merchants.

TechCrunch has a pretty good overview of CurrentC. They also have some nice screen grabs from the WalMart CurrentC app. Refreshingly, the app actually shows you what information it collects. You know, the usual stuff you give a WalMart cashier. Financial info and location, of course, and your health and medical records, and possibly browser history, phone and text logs, biometrics, and contacts. (User has these turned off in grab, if that's a control and not just status) No biggie.

 

[M Paquette]

Tl ; dr

Summary:
Apple Pay is a consumer-oriented design that hopes to lower transaction costs, largely there to cover fraud losses, by reducing fraud losses with a transparent end-to-end cryptographic scheme.

CurrentC is a merchant-oriented design that hopes to lower transaction costs, largely there to cover fraud losses, by shifting fraud risk to the consumer though the use of ACH based transactions (different rules and law than for credit cards), and by collecting data on consumers for more effective marketing and resale.

Meanwhile, see the Streisand Effect at work in the reviews of the invitation-only rollout of the CurrentC generic app over at the iOS App Store:

https://itunes.apple.com/us/app/currentc/id912922036

 

[Delawaredave5]

I think it is great that the retailers try "break the back" of the dominance of Visa and MC.

Pretax margins of even the best retailers is only 6%. These credit cards deserve 3% ? Baloney.

What innovation has Visa/MC brought ? We are using chipless magnetic credit cards that haven't changed in 25 years.

Only reason they get it is the industry is a 2 company near monopoly (oligopoly). I was hoping years ago that Discover card would "break in" and be a powerful 3rd, no such luck.

Apple Pay does nothing to break the Visa/MC dominance - in fact, it risks increasing fees as Visa/MC have to pay Apple.

I hope CurrentC succeeds - even though the system is technically inferior, I have an iPhone 6, and really want to get rid of my wallet.

These oligopolies are extorting wealth from society - wealth that can help us retire. Another one is the TV industry with Comcast / Verizon.

Markets with 3 or more real competitors deliver best products at lowest prices.

 

[Delawaredave5]

In the end, we are the ones paying the 3% Visa/MC fee. So if one's Visa bill is $3,000/month, that's $90/month in transaction fees being paid.

That's a substantial monthly expense !

I'm a "free market guy" generally, but something has to be done - read below link about fees in Europe.

EU could teach US in regulating credit card fees | TheHill

 

[photoguy]

I think it is great that the retailers try "break the back" of the dominance of Visa and MC.

I agree but that (reduction in fees) appears to be the only thing good about currentC. The other drawbacks are so large that it would be a non-starter for me.

In the end, we are the ones paying the 3% Visa/MC fee. So if one's Visa bill is $3,000/month, that's $90/month in transaction fees being paid.

That's a substantial monthly expense !

I try to recoup this with straight cash back credit cards. My current card gives a straight 1% back and but others go higher (e.g. 2%).

 

[Sarah in SC]

I'm not remotely interested in CurrentC's apps that require a different one for each store, AND collect information beyond what is needed for the actual transaction. Nope, do not want. Just to save them money and make it more inconvenient for me? Definitely.

 

[audreyh1]

Just FYI - CurrentC is now officially dead, to be deactivated on June 28 2016

Apple Pay rival CurrentC closing up shop for now - CNET