The Apple chief executive Tim Cook rebutted the CVS and Rite Aid after pharmacy chains blocked the mobile payment service, the creator of the iPhone, saying that there are several other retailers around the world to accept the service.
The Apple Pay was released about a week and saw more than a million credit recorded in the first 72 hours cards. The service says it has more transactions than any other payment methods “contactless” combined, Cook said, citing data from Visa and Mastercard.
These services, with which a user makes a payment holding a smartphone near a terminal specially designed, failed to become popular in the United States, despite support from Google and other influential players.
News emerged over the weekend that the two retailers have opted not to use Apple Pay, preferring a rival system to about 50 retailers, including Wal-Mart and Best Buy, are developing for their own use.
“We have many other merchants to enter (in service), we have many banks to enter and have the rest of the world,” Cook said on the conference Digital Live Wall Street Journal, the most extensive statements of the company so far on the block.
CVS and Rite Aid did not explain its surprising decisions. However, the driving force behind the development of a proprietary payment solution for retailers is to avoid paying transaction fees credit card companies such as Visa and Mastercard, analysts said. Varaim rates between 2% and 3% of the cost per transaction.
Reject
Some big US retailers are refusing to use the new electronic payment service from Apple competitors to develop systems that boost their profits by eliminating transaction fees on credit cards.
Wal-Mart is among about 50 large retailers who chose not to accept Apple Pay, next to Rite Aid and CVS HealthCorp. The companies say they are working on developing their own payment systems, called C Current through the consortium Merchants Customer Exchange (MCX).
The push to develop own mobile payment solution is to avoid paying fees to credit card companies such as Visa and Mastercard, analysts said. Rates are between 2 and 3 percent of the costs per transaction.
“The economy and the benefits of having your own payment system is definitely one of the main reasons,” said Hitesh Sheth, chief executive of technology company for retail and cybersecurity Vectra Networks.
The Mastercard criticized the move of CVS and Rite Aid, claiming that limit consumer choice. “We are disappointed with the fact that both Rite Aid and CVS have decided to block its customers from using the payment method you choose,” the spokesman for Mastercard, Jim Issokson said.
Retailers who are rejecting the Pay Apple also refused to use mobile payment systems like Google Wallet and SoftCard. The spokesman for Wal-Mart, Randy Hargrove said the company is not using the Pay and Apple is focused on MCX, to be part of the heavyweights of the consortium.
Target said that it supports the MCX but also allows users to make online purchases through their mobile application using Apple Pay.
(By Deepa Seetharaman, Nandita Bose and Nathan Layne)
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