SOURCE: TECH DIRT
Over the weekend, it came out that two giant pharmacy chains, Rite Aid and CVS, had started blocking Apple Pay, the massively hyped new payment system from Apple that has received much praise for its ease of use. The product had worked for about a week before the two companies started blocking such near field communication (NFC) payments (which also takes out other NFC payment options like Google Wallet). While Rite Aid gave a vague and slightly ridiculous explanation -- that it is "still in the process of evaluating our mobile payment options" -- pretty much everyone knows the truth. A bunch of retailers, led by Walmart, have been creating their own mobile payment system called CurrentC, which cuts out the credit card companies. But, it also builds in all the tracking and spying features of store loyalty cards, expanded across all merchant partners. Apple Pay lets people remain anonymous.
In short: CurrentC lets merchants (1) cut out credit card transaction fees and (2) get more and more data on shoppers. No wonder they want to block out other options.
But this isn't the start of such fights. Last year, mobile carriers like T-Mobile, Verizon and AT&T sought to block Google Wallet in favor of a similar consortium of mobile operators, looking to create their own NFC payment system, which was unfortunately named ISIS until world events led the consortium to change its name to Softcard.
All of these moves should be concerning. They're clearly not being done with the consumer in mind. Nearly everyone who's played with Apple Pay has agreed that the system is a huge leap ahead for mobile payments in terms of ease of use. Instead, we're seeing giant organizations looking to team up to keep competitors out of the market. At the very least, this should raise serious antitrust issues. But it also demonstrates, in a different sphere, why net neutrality is such a concern. When you have large companies that can effectively collude to block or kill certain powerful and useful apps and services, it hinders and blocks important innovations, leaving consumers significantly worse off. Not only are they left with fewer choices and lower quality apps and services, but it also pushes consumers into services -- like CurrentC -- that take away their privacy.
In short: CurrentC lets merchants (1) cut out credit card transaction fees and (2) get more and more data on shoppers. No wonder they want to block out other options.
But this isn't the start of such fights. Last year, mobile carriers like T-Mobile, Verizon and AT&T sought to block Google Wallet in favor of a similar consortium of mobile operators, looking to create their own NFC payment system, which was unfortunately named ISIS until world events led the consortium to change its name to Softcard.
All of these moves should be concerning. They're clearly not being done with the consumer in mind. Nearly everyone who's played with Apple Pay has agreed that the system is a huge leap ahead for mobile payments in terms of ease of use. Instead, we're seeing giant organizations looking to team up to keep competitors out of the market. At the very least, this should raise serious antitrust issues. But it also demonstrates, in a different sphere, why net neutrality is such a concern. When you have large companies that can effectively collude to block or kill certain powerful and useful apps and services, it hinders and blocks important innovations, leaving consumers significantly worse off. Not only are they left with fewer choices and lower quality apps and services, but it also pushes consumers into services -- like CurrentC -- that take away their privacy.
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