Discount rates are the bane of merchants around the world. Simply put they are the percentage paid by merchants for each transaction that involves credit or debit cards. These fees can range from about 1% to as high as 5% for each transaction. If a high end hotel/resort does US$1 million per year in business with American Express for instance they could be charged as much as US$35,000 in annual fees.
ApplePay, a new payment system launched on October 21, 2014 was supposed to be the answer to this problem but it seems that the new system might be on the rocks.
The Verge reported yesterday that ApplePay was apparently being avoided by most of the major retailers, some of whom (Walmart, Kmart, 7-Eleven, and Best Buy) are planning their own mobile payment app called CurrentC, which is expected to launch next year sometime.
This means that it is unlikely that they will be getting enmeshed with ApplePay anytime soon. If the CurrentC rollout is successful, it will be available to about 110,000 merchants nationwide. CurrentC was designed by MCX, who said about the new app:
“The CurrentC Network was built by leading merchants to simplify, enhance and secure their customers’ shopping experience. This powerful platform will be available across a broad and growing collection of leading merchants in the big-box, convenience, pharmacy, fuel, grocery, dining, and travel and specialty-retail categories.
“Consumers will be able to gain access to the entire CurrentC network and all its benefits by using the CurrentC app as well as through merchants’ mobile applications that utilize CurrentC functionality.
“CurrentC has been launched in private pilot mode in select locations across the country. The private pilot will expand through 2014, with regional and national rollouts to follow in 2015.”
ApplePay only has 34 retailers currently enrolled in the system, eight of which is a variation of Foot Locker and one is Apple itself. If you like buying shoes then it seems like ApplePay might be just the thing but until CurrentC (which still has not been accepted by a single bank) is market ready, a credit card might be your only option. This could be a huge opportunity for payment platforms like Coinbase and BitPay, if they could get through to the public on the advantages of cryptocurrency payments.
Such issues can be avoided simply by using a Bitcoin wallet instead of a credit card. It would also open up an entirely new international market for customers who do not want to pay exchange fees just to shop at Walmart online. It should be exciting to watch who will come out on top as one reddit commenter put it best:
“It's like a war, except nobody dies and the customers will probably win. It should be exciting to watch this unfold."
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