Rite Aid adds Apple Pay, Google Wallet for in-store payments
Rite Aid has been a supporter of yet another competing in-store payment system, known as CurrentC, which is backed by WalMart and dozens of other major retailers in a group known as MCX.
Before today's announcement, Rite Aid and other retailers had turned off Apple Pay and other NFC (Near Field Communication) payment capabilities on their in-store payment terminals out of allegiance to MCX.
They did so as a result of a protracted battle between major U.S. retailers and major credit card companies over the added cost of "swipe" fees that retailers pay to card companies and banks. Swipe fees add 2% to 4% per transaction, and MCX members have offered up an alternative that cuts the card companies, and the banks behind them, out of the payment process.
Despite moving to Apple Pay and other NFC systems, Rite Aid "remains a strong supporter of CurrentC," spokeswoman Ashley Flower said in an email. "Our mobile payment strategy includes the acceptance of CurrentC when it becomes available on a nationwide basis."
In addition to supporting smartphone payments with NFC, Rite Aid said it will accept payments with "tap and pay" credit and debit cards, which are cards that incorporate a computer chip for added security. Many retailers will require chip cards to be inserted, or dipped, into a payment terminal. The "tap and pay" approach is a few seconds faster than dipping a card, and is considered as fast as using a smartphone with NFC that activates a payment by bringing a phone near a payment terminal.
Rite Aid joins Best Buy and others in sticking with MCX but also accepting Apple Pay and other payment systems.
Rite Aid CEO Ken Martindale said the move to mobile payments is a way to offer customers "an easy and convenient checkout process, which we know is important to them." Analysts view small payments for candy, sundries and other items like those made at pharmacies as the best way for smartphone payments to catch on.
Apple Pay has steadily gained ground with retailers, and Apple has stated it will be accepted at 1.5 million locations in the U.S. by year's end. There are an estimated 12 million payment locations in the U.S., but Apple Pay is by far the most successful smartphone payment system so far.
MCX is expected to rely on QR codes to accept payments, with the possibility of adding NFC at some point. Customers would transfer funds for payments from their own accounts to the MCX merchants and possibly use store credit accounts, instead of credit from Visa or MasterCard. The rollout of CurrentC was slated to have begun at the midyear point, possibly July 1, in an unnamed, midsize city. MCX wasn't available to comment on the status of its rollout.