5 Things C-Store Operators Should Know About Apple Pay

By Vladik Rikhter

Apple Pay

Just like Instagram is social media’s cool kid in school, Apple Pay is turning heads in the mobile payments industry. It’s among the platforms we covered in our 5 c-store technology trends for 2015.

Apple Pay allows iPhone 6, iPhone Plus 6 and Apple Watch users to pay for fuel and other goods and services via their smartphone.

In October, Chevron announced that it would accept Apple Pay at more than 3,000 Chevron and Texaco ExtraMile locations before the holiday season.

Before taking a big bite of Apple Pay, here are five things c-store operators should know:

1. When used in-store, Apple Pay qualifies for card-present rates

Merchants pay credit card companies a fee, usually 2 to 3 percent, every time a credit card is used for a purchase, and Apple Pay is part of this system.

2. Apple Pay has met resistance from big retailers

Many big retailers view credit card companies as the enemy. Remember the swipe fee lawsuit saga? Big Retail believes swipe fees are too high. As a result, some c-store retailers, including 7-Eleven, refuse to accept Apple Pay and other competing mobile wallet platforms.

3. Apple Pay’s main competitor is CurrentC

Google Wallet and Softcard (formerly Isis) have not caught on in terms of widespread adoption. Rather, CurrentC was set up via the Merchant Exchange consortium (MCX) and is spearheaded by Walmart. CurrentC helps retailers boost profits by reducing credit card transaction fees required under the Apple Pay system.

However, CurrentC is clunky to use since it involves scanning QR codes. Apple Pay is more convenient for users. You simply hold your device up to the contactless reader, which will open up your default credit card and use a biometric fingerprint scanner to certify the transaction.

4. Apple Pay requires extra hardware

While QR codes are clunky, CurrentC requires a QR reader on a smartphone and the code on the cashier’s screen. In contrast, ApplePay requires a payment processor with a near-field communication (NFC) reader that allows for contactless payment. As of October, only 10 percent of U.S. retailers had installed these readers, Mark Hung, an analyst with IT research firm Gartner, told the New York Times.

Additionally, each terminal must be equipped with software that accepts contact-free payment, and a merchant account that accepts Apple Pay.

5. Using Apple Pay is more secure than swiping a card

Apple insists it is not in the business of collecting data, and that any in-store transaction with Apple Pay stays between the customer, the merchant and the bank. Also, the cashier won’t see a customer’s name and security code. You just have to accept the premise that Apple will not store your card information somewhere on a cloud.

The Takeaway

As you can tell, there are some stumbling blocks to widespread adoption of Apple Pay. To be fair, however, the platform seems to make payment easier for consumers than rival platform CurrentC, which seems hellbent on making Visa suffer. We’re serious. We leave you with this now infamous quote:

“I don’t know that it will, and I don’t care. As long as Visa suffers.” Lee Scott
Former Walmart CEO when asked if MCX will be profitable

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