Apple’s fight over payment apps hurts industry


Matthew Tessler, Staff Columnist

Apple Pay is great. Having a random, encrypted security code stored within the hardware of a phone that keeps digits hidden can greatly reduce the risk of credit card fraud. If a phone is lost, the owner can remotely erase his or her information. If a retailer is hacked, credit card numbers will not be stored. Apple Pay is also simple, bringing users one step closer to the technologically enhanced future that awaits them. 

This future has in large part been engendered by Apple. The industry giant has gained a reputation for being the wealthiest and most powerful company in the world. The corporation gives customers yet another reason to shell out $600 every two years. While the innovative payment platform is not novel, Apple has introduced an enticing new product to an otherwise stagnant system. Despite profiteering, Apple has created something that could slow the epidemic of credit card fraud in this country, saving billions of dollars.

The biggest threat to Apple Pay’s success is that brick-and-mortar stores have alternative plans. Squeezed by the push toward online shopping, these stores rely on narrow profit margins that are further slimmed by the 2 percent fees paid to credit card companies.

A coalition of retailers called Merchant Customer Exchange was created to use the mobile payment platform to bypass these credit card companies and go straight to the bank. Their app, CurrentC, is clunky at best and hopelessly inferior to Apple’s system. When retailers refused to accept Apple Pay in order to give CurrentC the opportunity to compete, the reaction was negative. People were quick to support Apple and criticize the retailers’ transparent attempt at exacting more profits and capturing customers’ data. When CurrentC was hacked, it further showed that MCX was apathetic to customers.

Retailers are not the only corporations involved — credit card companies and Apple have also been ruthless. In the past, Apple has negatively impacted both consumers and manufacturers by inflating prices and using brutal factories for production. In the public arena, Apple has an elevated reputation, painting itself as philanthropic with fantastic new devices that change lives. While it is true that Apple products have had a stunning global impact, the company is not entirely innocent.

Before individuals blindly support Apple, they should think critically. Retailers breaking up the control of credit card companies is beneficial for consumers and the small businesses that are forced to pay these fees. These retailers may not have Apple’s marketing teams, but individuals need to be cognizant of Apple, which will seize profits as easily as the next corporation. The public should not endorse Apple going unchallenged in this sector — competitors should not be denied a chance.

 A version of this article appeared in the Tuesday, Nov. 11 print edition. Email Matthew Tessler at [email protected].