Apple, Google take on Main Street in BONKING-FOR-CASH struggle

When Apple honcho Tim Cook took to the stage to introduce Apple Pay, he promised it would simplify the way people pay for goods and services, but the road to that goal has not been smooth since. Last week came the news that some Apple Pay users were getting charged twice for the same purchases. Teething pains are to be …

[Anonymous Coward]

Plenty of retailer incentives for MCX

No fees, continuing gathering info on your customers, push ads at them...I can see why they don't like Apple Pay, it has the same fees as credit/card cards, and don't have any ability to know who is buying their stuff or advertise at them.

What exactly is the incentive for consumers to download this CurrentC app on their phone and scan codes or whatever it is they're supposed to be doing, instead of using the tried and true card or cash payment? I suppose they could offer you a small discount, giving back the fees that would otherwise go to the banks, but I ALREADY get cash back using my credit card, so whatever pittance they'd offer above that won't be worth it to me to get ads shoved in my face.

Plus I wonder how they'll deal with fraud...if my phone is stolen, and someone uses it to charge a bunch of crap at Walmart, do I get my money back? I doubt it, because there are laws that grant me zero liability for fraudulent credit card charges, but no such law for a special Walmart/CVS app that draws directly from my bank account! They'd tell me, "too bad, shouldn't have let your phone get stolen"

These retailers don't have to support NFC, and to be honest I don't really care if they do or not, and won't change my shopping patterns based on something like that. But if they make it more difficult for me to pay the way I choose to pay and try to force me into using their system, I can promise I'll never darken their door with my presence again!

[ecarlseen]

Re: Plenty of retailer incentives for MCX

The TOCs that are available now for CurrentC beta testers indicate that liability for fraud is basically on the consumer - so if your phone is stolen and used to ring up some large purchases at WalMart, then tough luck for you. Since the money is swiped straight from your bank account, you have pretty much zero recourse (well, you can write them a letter and tell them how angry you are).

My understanding is that Apple has negotiated slightly lower than "card-present" rates for Apple Pay merchants, and Apple is underwriting some of the risk themselves to get the banks and card processors on board. Beyond that, the standard credit card protections apply. We own a retail shop, and my understanding is that it will cost us about $600 per terminal to get the necessary hardware - not really a big deal.

[Peter 39]

Re: Plenty of retailer incentives for MCX

And you'll have to upgrade your POS terminal by next October anyhow - for EMV compliance (i.e. accept chip cards). So the incremental cost for NFC will be fairly low.

[gnasher729]

Re: Plenty of retailer incentives for MCX

It's "card-present" rates for the merchants with Apple Pay (which _is_ the lowest rate). The banks are carrying the risk, not Apple; on the other hand you can be sure that the banks have some clever guys who very carefully checked everything, and the secure chip which is the most important part is actually designed by the banks. The banks actually pay a small percentage to Apple, which they intend to recover by having less fraud taking place. You might have a crooked employee writing down credit card numbers; he won't have anything to write down with Apple Pay.

[Irongut]

Re: Plenty of retailer incentives for MCX

What exactly is the incentive for consumers to bonk their phone on the sales assistant's head or whatever it is they're supposed to be doing, instead of using the tried and true card or cash payment?

[chris 17]

Re: Plenty of retailer incentives for MCX

@Irongut What exactly is the incentive for consumers to walk around with a phone in their pocket when there are payphones everywhere?

[Joe Gurman]

Re: Plenty of retailer incentives for MCX

"What exactly is the incentive for consumers to walk around with a phone in their pocket when there are payphones everywhere?"

In what country, or perhaps what time machine, was this written?

[jherz]

Re: Plenty of retailer incentives for MCX

The country of irony-satire. I thought the comment was funny!

[Anonymous Coward]

@Irongut

There is none, unless like me and many others in the US you have only old fashioned mag strip cards so using Apple Pay would be more secure. Once we have EMV cards like the rest of the world, there is no reason to use Apple Pay over the card in your pocket. I've always said NFC was a solution looking for a problem, while there's a short term problem in the US of insecure credit card transactions it can fix, once you have a EMV card there's little point to paying with your phone.

The one exception might be how much purchase information others get. With Apple Pay the retailer gets none, and Apple doesn't keep a record of your purchases (they make their money on hardware, so we're their customers) I don't know whether the retailer gets any info with Google Wallet or a EMV card, but Google is definitely tracking the purchases you make using their Wallet. This is EXTREMELY valuable information to them, as it fills in the missing piece between search, web site visits (if using Chrome/Android), previous in store visits (if you're using Android) and purchase - every retailer's DREAM!

Anyone know for sure exactly what information the retailer gets on you if you pay via EMV card, either at the point of purchase, or get later from their payment processor? The one thing that would make me adopt Apple Pay would be if they still get my name or other unique ID information when I make a purchase with my card, as they get nothing but my one time token when I pay via Apple Pay. That would be worth changing my buying habits.

[JW 1]

Re: Plenty of retailer incentives for MCX

Man, if I could pay by bonking my phone on the clerks head that's the only form of payment I'd use.

[Anonymous Coward]

Re: Plenty of retailer incentives for MCX

One does not get the excitement of not being able to buy things when the battery dies or accidentally dropping one's phone while authorizing a charge.

[DryBones]

Really?

"Many retailers have already seen the benefits and are delighting their customers at over 220,000 locations."

Bless me. I can't find the comic, but I seem to remember one about some card that got the user off when swiped through the reader. This is the only way I can visualize someone being justified in describing paying for tat using this language, and I don't think that's a feature even of the iPhone 6 "Size Matters" edition.

[Charles 9]

At this point, the status quo favors the retailers, so they can stonewall. If NFC doesn't give them any advantage vs. now, they simply won't use it. I know plenty of retailers that tried NFC at first...then dropped it, which indicates they're willing to hold everything back because it doesn't affect them. In fact, I'm seeing new C&P terminals being installed that don't have NFC capability, leading me to believe they're willing to let NFC cards die on the vine. Walmart refuses, so does Target. Sears doesn't support which means neither does K-Mart. Lowe's is out. Best Buy's support is limited, and Kroger is one of those that dropped support. Probably the biggest retailer that still supports it is The Home Depot, and it's recently had a security breach. Looks to me like support's not there in the stores that matter. The size of the anti camp also makes boycotting difficult since at this point boycotting will likely mean paying more money when many people can't spare the change.

[chris 17]

Hopefully Apple, Visa etc will have the stomach to launch Apple pay in the rest of the world where it will flourish, before its abandoned in the US in favour of some backward technology.

[Fazal Majid]

Apple could ban the CurrenC app in tit for tat, but they probably won't bother as it looks likely to be stillborn. The Wal-Mart demographic doesn't overlap Apple's too much, but CVS should definitely be concerned at losing market share to Walgreens.

[JohnMurray]

Who really cares?

I have no intention, as yet, to use pay-by-bonk, in any of its forms.

If they make it mandatory, in preference to the standard card-and-pin, then I can just pay cash (or not use the service)

I should give a rats backside.

[goldcd]

I dunno - I quite like our current system

Chip and Pin on a regular card doesn't seem particularly arduous to me. For small purchases (coffee, papaer, sandwich etc), the NFC without pin on the regular card feels pretty smooth.

I'd certainly like to not have to carry my wallet around with me - but whilst I use cash, and can't guarantee every vendor will take NFC, I'm going to be carrying it.

If I'm carrying my wallet about anyway, I'm not quite sure what advantage NFC on my phone gives me.

That's not a criticism of Apple, it also goes for Google and EE and all the rest who've tried. Apple Pay solves a problem that doesn't exist. If there was any hope of this working, it need the CC providers (Visa, Mastercard, Amex etc) to get behind it. Only thing the retailer is scared of is the withdrawal of their ability to accept card payments. Therefore they're the only person that can mandate usage to the retailers. And.. I've no idea why they'd want to.

[gnasher729]

Re: I dunno - I quite like our current system

Apple Pay solves some different problems: The first problem is that often you hand over your card, and some crook can take advantage of that and copy your card number and the security number on the back. Then the crook can order 50" TVs on the internet and hope to get them delivered while you or your credit card company pay. With Apple Pay, nobody ever sees your credit card number.

The second problem is hacked terminals that record data while they are used; with Apple Pay nobody except the closed chip inside the phone and the computer at the bank's backend ever sees any useful (unencrypted) information, so even a hacked terminal cannot affect you.

The third problem is the problem in the UK where cards with NFC are limited to about £20. That's because a stolen card works just as fine as a card held by its owner until the loss is reported, so they limit the loss to £20 a go.

[Anonymous Coward]

Re: I dunno - I quite like our current system

The only convenience for NFC (on phone or card) is that you don't need to enter a pin. Why not just offer that with chip-and-pin cards too if the amount is less than £10? The security issues around getting the card stolen would be the same.

[Test Man]

It's about choice, not making NFC mandatory, OBVIOUSLY. So take your tinfoil-hat off.

[Anonymous Coward]

The US is still in the stone age

when it comes to online transactions

Lets take a real example.

You drive into a Gas Station and put your credit card into the Pump Terminal. So far so good.

Then you put in your Pin. Again so far so good.

Then the frigging thing asks for a Zip code.

As a traveller you are stuck. so you go inside and offer your card to the clerk.

I want to put $40 on pump 3 please.

The clerk takes your card, swipes it and you enter you pin on the device. Then she says, 'Zip Code please?"

WTF?

The pin has been auth'd online so the merchant is not liable. So why do they need my Zip code?

It turns out that many gas stations/retailers won't take out of state Credit/Debit cards and the Zip code is the way of detecting that. Also, there are still laws on the statue books that date from the prohibition era that limit how much money in cash you can carry over state lines.

The only solution to buying gas/whatever is to offer cash to the clerk. Overpay in advance and then go back into the station and get your change. It all takes far longer than it should.

I was even asked earlier this month what the chip was on my UK Credit card. They'd never heard of Chip and Pin.

Then in many grocery stores, a lot of customers still pay by cheque.

Years behind the rest of the world. (well a good part of it. I've even used Chip/Pin in India)

[Charles 9]

Re: The US is still in the stone age

And content to STAY that way, too. I hear many people don't like C&P because they'll lose the zero-liability protection with the signature cards (in the US, almost every credit card has zero liability if the theft is detected quickly). After all, if someone steals your card and knows the PIN, how can you say you didn't give the PIN to them? That makes you legally liable. And contactless has the stories of those skimmers, especially the story of the skimmer in Vegas who used a directional antenna to skim NFC details a block away. More people keep checks because it leaves a paper trail and out of order checks trip red flags.

Chip & PIN? Many would say, "You can KEEP it!"

[Anonymous Coward]

Re: The US is still in the stone age

I don't like NFC (aka No Frigging Chance that I'll ever use it). I'll keep on uaing my Oyster card even though my bank keeps on wanting to issue me an NFC enabled card.

We had many of those concernes on thie side of the Pond about C&P as you have. They have largely gone away. The amount of fraud is way, way down than before and in many cases the banks do re-imburse the cardholder if there are problems.

As for cheques, the sooner they are consigned to the history book the better. I had mine stolen way back in the 1970's and the thief went on a spending spree using a false passport as ID. Thankfully at the time I couldn't write cheques due to a broken wrist so there was no doubt about getting my money back. There are weaknesses in all systems.

What has C&P to do with NFC? not a lot really.

[Chands]

Re: The US is still in the stone age

In the UK I use C&P Credit Card for everything. This has zero liability on the consumer. Debit Cards do not have zero liability, however there is some protection against damaged or undelivered products/services.

I really cannot be bothered with Cash/Cheques any more. I find taking out a piece of plastic and typing in a 4 digit pin, or signing something extremely convenient.

There is now very little barriers to using a card, I can even buy a single pint in a pub with a card, there's no spending minimum these days.

I do remember remarking how when I was in the US in 1993 that people were paid still by cheques and further astonished (in a positive way this time) that these cheques could be cashed in a Supermarket (VONS).

Whereas in the UK money is deposited straight into your account via BACS. Cheque books in the US were not free either which I thought was odd.

The adoption of C&P over signature was a major boon. I don't think it has increased the amount of fraud, people before had to emulate your signature, but now had to get hold of your PIN. Just a different barrier, but more convenient for the end user at the end of the day.

[Bradley]

Re: The US is still in the stone age

What cracks me up in the states are the drive-thru vacuum tube banks. Beyond bizarre.

I was surprised when travelling recently, at a Y'allMart in Kentucky of all places, when they had me use the chip reader when I was expecting to have to swipe. Little miracles I suppose.

[smenor]

Funny..

it wasn't «invite only» when I downloaded it yesterday so I could give it a negative review.

[wikkity]

Re: Funny..

Thought they meant it was invite only for the vendor.

[Decade]

This is really about liability

As far as I can tell, the retailers are upset about how the payment processors are trying to get them to move to more secure payment methods. Starting some time next year, the retailer is responsible for any fraud done using old-fashioned swipe cards. I guess the retailers don't like to be pushed around, so they're retaliating through their customers. This is the best explanation I can find for why they want to push such a consumer-hostile system as CurrentC.

As for me, I don't trust digital payment systems with all their tracking methods, so I pay for most purchases with cash.

[Charles 9]

Re: This is really about liability

I think what you describe is more the reason they're rolling Chip-and-PIN in the US NOW, because without them the retailer can be left with the blame. Contactless payments are being fought according to the matters the article noted: mostly about control. Basically, if the retailers can't get more control over transaction metadata, then they're not interested in any kind of improvement. Contactless gives no concrete security improvements and the processors can't justify a forced switch to accept contactless (if they tried, the retailers could claim false advertising and take them to court). And given that Walmart and Kroger are the #1 and #2 retailers in the US, you're talking some serious muscle.

[zebthecat]

Er...

Two bald men fighting over a comb.

[Semtex451]

As if

"Apple told The Register in a statement."

You must think we're stupid

[Simon Rockman]

If Apple Pay fails..

NFC in phones is dead. It's never really been alive but the squabbling over HCE and SWP kept it from ever having any traction and I predict that this Barcelona will be the year where we see new high end phones from manufacturers who in the the past have supported NFC, without the tech.

SImon

[Charles 9]

Re: If Apple Pay fails..

"NFC in phones is dead. It's never really been alive but the squabbling over HCE and SWP kept it from ever having any traction and I predict that this Barcelona will be the year where we see new high end phones from manufacturers who in the the past have supported NFC, without the tech."

It's rare for a piece of tech to be put in a phone and then taken out again without a successor. As tech ages, it becomes cheaper to implement, especially now that a Secure Element is not a requirement anymore thanks to Host-based Card Emulation. Eventually, it becomes a matter of "Why not?" meaning unless its mere existence constitutes a serious liability, they'll throw it in just to avoid being left behind when someone finds a better use for the tech.

[George 8]

"Apple told The Register in a statement."

When did hell freeze?

You can see how important this is to Apple. Its so important they actually talked the El Reg. Wont have it, it cant be so.

[Anonymous Coward]

Non starter

"A lot of people are twitchy about handing over detailed bank log in information to a third party"

Card details are one thing, but login details? Surely that would actually be excluded by the banks terms of service in any case. A bit of a non starter for a system that is in any case more complex to use, and it would seem for fairly trivial amounts.

But wait, there's more:

"...that the CurrentC software also has the capability to deliver advertising to users' handsets..."

So completely dead in the water then, or has April 1st moved rather a lot?

[John Brown (no body)]

QR codes...established technology...most people know how to handle.

I don't believe that statement re QE codes Maybe in the USA, but here in dear old Blighty QR codes seem to have disappeared.

I suspect that in the USA, new payment methods are being tried because judging by previous comments above, they are stuck in the past. Here in the UK Chip & Pin is ubiquitous and it seems that most C&P machine are NFC enabled as are most debit/credit cards (you can have it disabled on your card if you want, I did)

I can't see a QR code payment method even trialling over here since both C&P and NFC are already in place almost everywhere, work and most importantly everyone knows C&P and many even know about NFC now.

[Charles 9]

Re: QR codes...established technology...most people know how to handle.

QR Codes are still active in America, probably thanks to a greater Asian exposure (you want to see QRs everywhere, go to Asia). There's also the Data Matrix barcode. It was here and there for a while but is now settling into a more-technical role in industrial applications.

I'll give you the nod about Chip-and-PIN. Thanks to an upcoming mandate from credit card companies regarding liability, Chip-and-PIN will be pushed into America over the next year. And as long as MCX is against any system other than its own current beast, NFC for payment will remain small potatoes (if MCX wises up and makes their system slimmer and less intrusive, then something might come of it, but not as it is now).

[User McUser]

Re: QR codes...established technology...most people know how to handle.

I suspect that in the USA, new payment methods are being tried because judging by previous comments above, they are stuck in the past.

For most it's a case of "if it isn't broken, don't fix it." It takes almost no effort to get out my credit card and swipe it through a mag-stripe reader. NFC or QR codes add another layer of complexity, provide no apparent additional benefit, and reduce legal protections.

So not so much stuck in the past as unimpressed with the available upgrade options.

[phil dude]

random...

I went to Panera (cafe) yesterday and they were already accepting apple bonk...the manager was keen to point out "Android will be added soon"... I think they thought my ancient Nokia was bonkable...(my N9 is, not my N8).

Looks like Starbucks is in too already. They have been QR coding, but the food service industry LOVES this , because it is QUICK.

Beer icon, because running a tab in the US, I may only get to bonk once a night...

P.

[gnasher729]

Re: random...

If Apple Pay worked, then Google Wallet will also work. Unless someone worked really hard to add code somewhere between the terminal and the bank that specifically recognises tokens created by Google Wallet and blocks them, which would be a stupid thing to do. Of course the manager might not know this until someone actually tries it and it works.

[Anonymous Coward]

QR codes? Really??

Ooh, new hack vector!

1. Compromise the POS terminal so that the printed QR on the receipt takes you to a malicious payment site.

2. Collect bank login details

3. Profit!!

For those wanting to find out more: http://shouldiuseaqrcode.com/

[Charles 9]

Re: QR codes? Really??

If the QR code is related to the payment system, it would likely be a token rather than an address, meaning trying to hijack the barcode would be worthless (the system would detect an invalid token and block the transaction). Anyway, if you've hacked the POS terminal, you can probably hijack the transaction itself instead. Anyway, my barcode scanner is rigged to display the results first and letting me decide how to proceed.

[Peter 39]

CurrentC from MCX has several "issues".

1. you have to provide direct access to your bank account, via either direct debit (via ACH transactions) or debit card info

2. you have to give them your SSN (social security number) and driver license info

All this goes into the database-in-the-cloud and makes an extremely juicy target for identity theft. Everything you want all in one spot !

With a credit card there are at least some consumer protections. With CurrentC/MCX there are none. It's a disaster in slow motion.

[pdxbrit]

Can't emphasize this enough. With your credit card, you have protection. With CurrentC, you're screwed.

I suppose they hope people are really stupid. If you're not going to accept C&P, I'll just pay with the credit card the old-fashioned way, so you'll still be stuck with the CC fees (avoidance of which seems to be one of the major drivers here). There's not a snowball in hell's chance I'd sign up for CurrentC.

[Joe Gurman]

Well, there's this

Maybe in the UK, there have never been any card info harvesting exploits, but here in the backward, as yet card chipless States, there's a continual litany of Target, Needless Markup, Home Depot, &c, &c. handing over millions of customers' PII to "resellers." If MCX in fact requires bank account access and Social Security Number, Apple Pay is better for my primary concern: not sharing personal financial information and possibly access to my bank account with criminals. All the other considerations are invisible, compared with that. I hope Google and other competitors offer similar anonymization of credit transactions, and will happily dig for my phone in my trousers pocket every time I purchase something to insure that level of security. And unlike chip-and-pin, I can use Apple Pay online as well without worrying about interception of a PIN or password.

[Anonymous Coward]

This article rather misses the point, to use ApplePay, hold finger on scanner while placing said phone on payment terminal, payment made.

To use MCX, start phone and open, activate MCX app, use camera to scan QR code....much clumsier and less efficient. And have you seen the demo receipt printed, it's about a metre long with "free" coupons and advertizing.

As others point out above MCX's point is to allow your transactions to be compiled for marketing purposes and to enable targeted advertizing via the MCX application. Add the lack of security and the legal liability for incorrect transactions and you have a slow motion trainwreck in the making.

ApplePay actually looks like the sort of payment system we might like to use so let's hope it at least gets the chance to be used. If it fails to live up to the expectation it will fail soon enough.

[pdlane]

he promised it would simplify the way people pay for goods and services,

Huh....????

Cash is still the simplest way to pay for anything and it keeps your purchases along with where and when you shop being no one's business but your own along with reducing being inundated with unwanted annoying pop-up web advertisements.

I have a problem understanding why people want to give up all their privacy, not only in their financial transactions but also in their personal life..e.g. facebook, twitter, instagram, etc etc.... where they feel compelled to broadcast to the world every time they manage to scratch their left buttock with their right hand along with the need to include a selfy to prove that they have done so.

Maybe I am old fashioned... preferring to enjoy my personal privacy, but I find that these toys have led to the dumbing down of people.... leaving me to scratch my head in wonder when in the cereal isle of the supermarket observing someone on their smartphone calling to find out which box of cornflakes to purchase.

Yes... I do have plastic... one of each... to use for on-line and telephone purchases along with "pay-at-the-pump" for gasoline and use checks to pay bills received in the mail/post...