Although Apple Pay has been getting a lot of headlines lately, it’s not the only phone-based payment system around. Google Wallet, for example, which — like Apple Pay — allows you to pay with your phone using NFC (Near Field Communications Technology), has been around for a couple years.
And now, we’re about to be
graced cursed with MCX CurrentC, a mobile payment system designed by retailers, in the best interests of…retailers.
It’s certainly not designed with consumer privacy, security, or convenience in mind. And yet the conditions under which CurrentC is being deployed requires that stores remove or disable NFC payment terminals — in effect banning Apple Pay and Google Wallet. And that’s why you should care about this: because retailers signed on to CurrentC have crippled all other modern payment methods, leaving you with the choice of using CurrentC or the old-school (and also insecure) magnetic stripe cards.
The sheer audacity of this system in the way it throws out convenience and security in order to use people as a lever against the credit card companies is what compels me to write about it. The retailers want to force credit card companies to lower their fees. And they’re going to shamelessly use you and your personal information to do it. The former CEO of Wal-Mart reportedly said, “I don’t know that MCX will succeed, and I don’t care. As long as Visa suffers.”
Let’s look at a prime example of the differences between a system designed around the individual consumer’s best interests, and one designed by old-school business types who don’t consider the user experience or privacy to be important factors when they’re taking your money.
How to use CurrentC to buy something
- Unlock your phone.
- Find the app and launch it.
- Wait while your camera fires up/focuses, then scan a QR code on the payment terminal.
- A different QR code then appears on your phone. Face your phone’s screen toward the cashier and do the screen-to-reader dance while she tries to scan it.
- Confirm the transaction on your phone. It now debits the money directly out of your checking account. (Yep!)
- Share the entire transaction with the CurrentC consortium of companies so they can track everything you buy (woops! You don’t actually have to do this, it’s done for you…automatically!!)
How to use Apple Pay to buy something
- Hold your iPhone near the payment terminal. Your default payment card automatically appears.
- Place your finger on your home button so it can authenticate with your fingerprint.
I’m not making this up
In addition to the clunky multi-step process to actually buy something with CurrentC, you may have noticed the bit about your bank account — yes, when you sign up for CurrentC, most users will have to actually connect it directly to their checking account. In a small nod to sanity, the actual transactions are conducted using unique tokens — your account and routing number aren’t being sent over the air — similar to how Apple Pay tokenizes your credit cards. However, it’s still pulling from your bank account.
Why is this? Well, retailers hate having to pay fees to the credit card companies. So this is their way around them — either by people actually using CurrentC so the merchants avoid the fees altogether, or by the mere threat of it as a lever to get the credit card companies to reduce their fees to the merchants. Great for the retailers, obviously, but consumers should be rightfully terrified of anything having access to their checking account. The main reason I use credit cards (and not debit) is to avoid a repeat of an account-draining identity theft I experienced 10 years ago. And if someone gets ahold of your credit card number (which has also happened to me), that’s a lot easier to deal with than if they actually get into your bank account.
Especially since, as TechCrunch notes in their analysis, the CurrentC terms of service place a high degree of liability on the user in the event of fraud. Yay!
The best part just might be the information they’re collecting. While Apple Pay was specifically designed to be private and secure — Apple never sees your transaction history, and the merchant never sees your real credit card number or even your name — CurrentC seems to have been designed to be the opposite.
Every time you make a purchase, CurrentC collects your payment info, location, and health info (what?) — and right now I have no idea why, but that’s more than a little disturbing. By default, they also collect your transaction history, although that can be disabled.
Not only that, but there’s the added annoyance of having to turn your phone screen so it faces a complete stranger, so the cashier can scan the second QR code. I’m just not a fan of that either — what if a personal or otherwise sensitive text message comes in right then?
Exclusivity is anti-competitive
All this wouldn’t be so bad if you still had NFC options to fall back on — like certain NFC-enabled credit cards, Apple Pay, or Google Wallet. But retailers know that the CurrentC system will not experience wide adoption — probably because it’s a terrible experience and invades your privacy, but I’m just guessing here — unless they force the issue. So, at least for some period of time, retailers in the CurrentC program will have their NFC terminals disabled, meaning you can’t pay with Apple Pay, Google Wallet, or the tap-to-pay credit cards (like my main MasterCard).
That’s not offering consumers choice. That’s strong-arming them into a less secure payment system with no alternative other than to continue using outdated and risky magnetic stripe cards.
Retailers will tout the benefits of CurrentC by tying it closely to their reward programs, so you automatically get your $5 Lowes discount without having to bring the coupon or something. I’m sure that will make it all worth it.
They don’t get it…so speak with your wallet
Retailers obviously think that this is going to give them a bargaining chip against the credit card companies, not to mention a goldmine of marketing data in your purchase history (and health data).
As a tech geek, user/consumer experience advocate, and someone who’s experienced identity theft multiple times, the nature of CurrentC makes me very concerned. I will certainly never use it, and will be avoiding retailers who champion it whenever possible.
This week, for example, I’ll be closing my Lowes store account — where, as an avid home improvement nut and hobbyist carpenter I spend untold thousands of dollars every year — and will not go there again until they reinstate NFC payments.
Other retailers on the CurrentC exclusivity train which I will now avoid at all costs:
- Old Navy
- Dunkin’ Donuts
- Sam’s Club
- Bed, Bath & Beyond
- Banana Republic
- Stop & Shop
- Most major gas station chains (Now I really want that Tesla… 😉 )
Sure, most people will still pay with magnetic stripe cards in the near future and I’m sure a few people boycotting them won’t make a big dent, but these are early days for mobile payments and those of us who tend to be tech influencers in our social circles can have ripple effects over time. So I’ll stage my little protest against CurrentC now, and maybe in a couple years it will be gone.
I encourage you to consider the implications of a system to take your money designed entirely by the very parties who are receiving that money, and decide if it’s something that you would want to support.
If you want more details, TechCrunch has a great write-up.
Meanwhile, I’ll be at Home Depot.