US pharmacies discard Apple Pay in favor of home grown alternatives

CVS Health Corp and Rite Aid Corp have blocked support for Apple's mobile payment system, possibly in order to launch a branded alternative.

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Credit: Apple

US pharmacy chains CVS and Rite Aid disabled support systems for Apple Pay over the weekend, potentially in favor of a rival system.

As reported by the New York Times, Apple's new mobile payment system was blocked over the weekend by the chains. While the reason is not immediately clear, it seems that near-field communication technology (NFC) terminals — the backbone of contactless payments — is no longer operational in CVS and Rite Aid stores.

A spokeswoman for Rite Aid Ashley Flower said that the company "does not currently accept Apple Pay," and the pharmacy chain is currently "in the process of evaluating our mobile payment options."

Unveiled in September, Apple Pay is a mobile payment service that allows purchases to be made by holding up the iPhone 6 or iPhone 6 Plus to NFC payment readers at supporting outlets. While CVS and Rite Aid are not original partners revealed at the launch of Apple Pay, according to the publication, Apple's mobile payment system did work in the pharmacies up until the weekend.

Apple Pay launched with over 500 partners, including US banks. The Bank of America, Capital One, Chase, Visa Europe and Square are all working with the iPad and iPhone maker to expand the reach of the mobile payment system.

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According to analysts, by removing support for Apple Pay, a path has been paved for branded, home-grown mobile payment alternatives. The NYT says that a rival system being developed by a merchant consortium both pharmacy chains are part of, called Merchants Customer Exchange (MCX). MCX is working on an application called CurrentC, a free service that connects merchants and consumers through mobile payments and loyalty rewards — and gives merchants a treasure trove of purchase data.

However, this mobile payment system will not be available until 2015.

MCX retailers include chains such as Walmart and Best Buy, and represent over $1 trillion in annual sales in the United States.

Speaking to the publication, MasterCard executive Ed McLaughlin said:

We think consumers should have the ability to pay any way they want. Rite Aid and CVS have been accepting contactless payments for quite a long time. We look forward to them turning the functionality back on in their stores.

Read on: Apple

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