Apple Pay has recently launched in the United States, but the launch isn’t going entirely smoothly: new details have emerged about retailers refusing to support the new payment system.
According to BGR a number of big name US shops, including Walmart, Best Buy and CVS have withdrawn support for Apple Pay, despite initially supporting it.
As BGR explains, the reason for this appears to be those stores are all members of the “Merchant Customer Exchange” (MCX), a rival payment platform that is planning to launch an app similar to Apple Pay in the future.
This could be concerning for Apple, as it could conceivably scupper the whole point of Apple Pay – and could be a sign of retailers pushing back against Apple’s power.
Previously when Apple has launched a new product in a new area, we’ve seen the existing industry roll-over and do whatever is necessary to keep Apple happy. Before the iPhone, phones were nearly always strongly locked down, and locked into phone networks: your old Nokia or Sony Ericsson would have been covered in (say) Vodafone branding – but when Apple turned up it broke the network stranglehold, which is why your phone network is now almost irrelevant to what you do on your phone. Because the networks knew that the Apple name was too powerful to mess with.
With Apple Pay by comparison, could this be an instance of Apple picking a fight with someone who is a little bigger? Walmart is the world’s largest company by revenue, largest private sector employer, and largest retailer – clearly it and other MCX companies don’t want to hand Apple control – let alone a small percentage – of its payment processing activity.
Of course, there’s no reason that consumer demand could eventually force MCX’s hand, but given MCX’s firepower, surely it could make Apple Pay seem like a non-starter? If nowhere supports it, the platform won’t take off. Apple is large enough to think it can beat the chicken-and-egg problem of a new payment platform requiring both a large pool of customers and a large pool of merchants – but if other retailers join MCX, the retailers together could potentially slaughter the chicken and scramble the egg.