Payment Wars: How Merchants And Carriers Are Trying To Block Payment Systems They Can't Track
from the dangeorus dept
Over the weekend, it came out that two giant pharmacy chains, Rite Aid and CVS, had started blocking Apple Pay, the massively hyped new payment system from Apple that has received much praise for its ease of use. The product had worked for about a week before the two companies started blocking such near field communication (NFC) payments (which also takes out other NFC payment options like Google Wallet). While Rite Aid gave a vague and slightly ridiculous explanation -- that it is "still in the process of evaluating our mobile payment options" -- pretty much everyone knows the truth. A bunch of retailers, led by Walmart, have been creating their own mobile payment system called CurrentC, which cuts out the credit card companies. But, it also builds in all the tracking and spying features of store loyalty cards, expanded across all merchant partners. Apple Pay lets people remain anonymous.In short: CurrentC lets merchants (1) cut out credit card transaction fees and (2) get more and more data on shoppers. No wonder they want to block out other options.
But this isn't the start of such fights. Last year, mobile carriers like T-Mobile, Verizon and AT&T sought to block Google Wallet in favor of a similar consortium of mobile operators, looking to create their own NFC payment system, which was unfortunately named ISIS until world events led the consortium to change its name to Softcard.
All of these moves should be concerning. They're clearly not being done with the consumer in mind. Nearly everyone who's played with Apple Pay has agreed that the system is a huge leap ahead for mobile payments in terms of ease of use. Instead, we're seeing giant organizations looking to team up to keep competitors out of the market. At the very least, this should raise serious antitrust issues. But it also demonstrates, in a different sphere, why net neutrality is such a concern. When you have large companies that can effectively collude to block or kill certain powerful and useful apps and services, it hinders and blocks important innovations, leaving consumers significantly worse off. Not only are they left with fewer choices and lower quality apps and services, but it also pushes consumers into services -- like CurrentC -- that take away their privacy.
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Filed Under: apple pay, collusion, control, credit cards, currentc, google wallet, mobile payments, nfc, operators, payment, retailers, softcard, wireless payments
Companies: apple, at&t, cvs, google, rite aid, softcard, t-mobile, verizon
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That said it's GOOD to see alternatives. Companies like Visa/Master have too much power in their hands.
Also, I hope the Govt weights in and fines Walmart & co for this.
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And Apple isn't playing nice with an open standard either as far as I know...and I'll just assume Apple isn't going to start off with an open standard on *anything* they do.
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http://appleinsider.com/articles/14/10/20/how-apple-designed-apple-pay-to-avoid-the-pitfalls-of-t raditional-payment-systems
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My credit card website can generate graphics that detail my consumption by groups (ie: food, fuel, clothing etc). Walmart & Co would be able to further split it in very specific items which is VERY worrying. Apple would still see where I spent money but not the specific items so it's less problematic. I would use their system because it is no different from my current card (hopefully G Wallet adds such functionality and comes to my country!). Of course I'll never willingly own an Apple device...
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Negative. It works with some terminals. Others will require an upgrade at a cost of $500 to $1000 per terminal.
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Many of the manufacturers are throwing in NFC to these terminals to make them more desirable to all merchants. Better to have an extra feature in all the boxes that can be turned on than not to have it all.
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The tokenization system used by Apple isn't a proprietary system.
Tokenization is handled, in part, by the Visa Token Service for Visa and the MasterCard Digital Enablement Service for MC. Amex has a similar service. While different in name, the AMCV (Amex, MC, and Visa) systems are in fact standardized, and together they've proposed a common framework to the industry.
Apple Pay is built on this standard.
So much for assumptions....
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Standardized doesn't mean non-proprietary.
"So much for assumptions...."
Indeed.
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Or do "standards" not count unless they're "open".
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That said, alternatives are good, but this alternative looks to be terrible.
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It has to work much like a current credit card works. Your account balance isn't stored on the card, just an identifying number that the retailer uses to contact a central server. If that central server is Apple, then they can see everything you do down to the specific store location.
If there is anything marked "Account history", then that data can be monitored.
Probably still better then the CurrentC and SoftCard thing. With those the controller can not only see how much you spent where, but what on spread across many stores.
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Apple is completely clueless. This link explains in better detail how a Credit Card works along with Google Wallet and Apple Pay.
http://appleinsider.com/articles/14/10/20/how-apple-designed-apple-pay-to-avoid-the-pitfalls-of- traditional-payment-systems
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Breaking NFC encrypting and capturing the token doesn't do you any good. The security code is one time use, and the token is also tied to a specific device so it can't be used on another phone.
Oh, and the token comes from your bank, not from Apple.
Apple Pay, unlike Google Wallet and CurrentC, also works without an internet connection. The only communication made is passing the authorization token to the payment terminal via NFC.
It would be nice if people bothered to learn how something works before setting up a straw man "it has to work this way" argument they can then proceed to knock down.
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The token is not 1-time, (at least according to that article linked by that douche a dozen times http://appleinsider.com/articles/14/10/20/how-apple-designed-apple-pay-to-avoid-the-pitfalls-of- traditional-payment-systems).
Therefor the retailer will get a pattern of spending, because customer 56*39(1 purchased a tooth-brush on Monday at the supermarket. On Tuesday they purchased some condoms at the supermarket. on Wednesday they purchased some flowers at the florist who's owned by the same company that owns the supermarket, later that same day they purchased a super vibrating extreme speed dildo at the sex shop chain also owned by the same parent company. The following Monday they went back to the sex shop seeking a refund of the defective dildo, which required them to provide their name, address and telephone number as well as 'waving' the NFC device over the sensor to authorise the refund to Apple Pay.
Now mega-corp AllKnowingMart knows who customer 56*39(1 is and can link all of their purchases to that person.
The token itself should also be encrypted (using a different key each time) so that the retailer can't build up a database of purchases.
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In fact this Link explains it better on how a Credit Card, Apple pay and Google Wallet works.
http://appleinsider.com/articles/14/10/20/how-apple-designed-apple-pay-to-avoid-the-pitfalls-o f-traditional-payment-systems
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Always use cash...but
I am waiting for the day when some retailer tells me they no longer accept cash, and apparently even though it specifically states on the paper bills that "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE" they could actually do this (some court case I heard about quite a while ago).
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Or just enter Jenny's phone number. (xxx)-867-5309 If it isn't registered in every area code already I'd be very surprised.
In my case, I had it tied to my phone number, then didn't use them for 3-4 years. Viola, my number has been reassigned to someone else so I just enter what used to be my phone number and give whoever has it the 'points'.
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http://www.federalreserve.gov/faqs/currency_12772.htm
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Re: Always use cash...but
Snopes
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Re: Always use cash...but
When I do go to such stores, though, I refuse to play along on principle. I won't use any of the usual tricks (bogus phone #s, etc.) Nonetheless, about half the time the clerk will just scan a card they keep for people like me and act like they're doing me some big favor.
I find the whole thing very irritating.
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Re: Always use cash...but
First thing that came to my mind was the Larry Flynt movie. Paid his 10K fine with 1 dollar bills carried by two strippers at least in the movie.
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Verizon is behind ISIS! I knew it!
Funny coincidence
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LALALALALALALALALALAAA!!!!
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Privacy?
And you don't think Apple isn't tracking as much as they can? Maybe they can't see what you buy, but they can see where you buy.
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Re: Privacy?
It really is completely Anonymous when you use Apple pay, even from Apple themselves!!! Here's a link that much better explains How a Credit Card works along with Google Wallet and Apple pay.
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http://appleinsider.com/articles/14/10/20/how-apple-designed-apple-pay-to-avoid-the-pitfalls -of-traditional-payment-systems
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But this is a teachable moment for you. Never make assumptions about people's beliefs and motives with such little information on them.
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And why should I trust Apple? Before there was Apple, Jobs was screwing Woz outta cash. Outside of Apple Jobs was denying Lisa was his daughter to avoid paying for his daughter. The statements about Apple ][, The Newton, the agreement violations with Apple Records, the agreements with the Mac Clones, the 'screw Motorola' position, et al.
Why should I trust Apple is looking out for me as a consumer in any way?? As one Apple CEO stated 'looking to maximize shareholder value' - that is done on the backs of the consumer typically.
Apple is not tracking anything because they can't.
Because there has been an end-to-end code audit by parties that are trustworthy?
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cash and (un)known numbers
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Re: cash and (un)known numbers
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All about the trust
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Re: All about the trust
http://appleinsider.com/articles/14/10/20/how-apple-designed-apple-pay-to-avoid-the-pitfal ls-of-traditional-payment-systems
AS for CurrentC. Not only is it all about tracking your Spending habits. But to get the cheaper service, they have to link Directly to your Bank Account. While you have Fraud protection when your Credit Card, You have ZERO with your Debit only card, let alone your direct Bank account. I also hear CurrentC links up and grabs your health info also.
Besides all the hassle of turning on your phone and unlocking it, finding and loading the App, just so you can scan a QR code or you scan a QR code. It can go either way. I don't know who in their right mind would use it.
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Criminy, we'll all go read your appleinsider article, ok?. Now will you please SHUT UP about it?
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Good info about Apple Pay. But it only reinforces my main point: I trust a consortium of retailers less.
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BTW, long time back, I'd give the RadioShack clerks the address "1600 South Beach St, Fort Worth, TX", which was Tandy's corporate headquarters. Only 1 in 10 clerks recognized it, an they just chuckled.
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I think you're overanalyzing this. For the purposes of currency, "debts" includes buying stuff in the way you describe.
But something that people often misunderstand is that there is no law that requires anyone to accept cash, whether for money owed or for on-the-spot purchases. There are a number of stores that simply don't accept cash at all.
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If they clearly state what they accept as payment upfront, it's on you for doing business with them.
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The federal reserve has a web page about this. There is no legal obligation for any private entity to accept cash, period. They don't have to tell you up front, even.
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What gets me about CurrentC is how stupid it is
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Re: What gets me about CurrentC is how stupid it is
I also hear that it's Grabbing your health info also!!! Talking about really taking things to far.
Apple Pay is a Snap. This whole CurrectC is a hassle. Better off to just use a Credit Card at that point.
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I wish there was an untrackable alternative
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American Greenbacks, Do Not Go Shopping Without Them...
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http://agbeat.com/tech-news/just-secure-apple-pay/
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Further, you just need to jot down the numbers to steal them. The phone's not needed at all.
But since you seem to think that they're equally insecure, let's try this. We both go to a seedy bar. You leave your wallet with credit cards behind, and I'll leave my Apple Pay-enabled Touch ID protected iPhone behind.
We then wait to see whose card numbers get stolen first, and whose appear second (if at all).
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CASH IS KING
If you're going to be a victim, you might as well be a loca-victim.
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I'm leaving now to go look up how to raise chickens.
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If that is not a sign that this is a seriously bad idea, I do not know what is.
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AntiTrust?
Just use other vendors if you don't like them. People do this millions of times a day.
Joey uses AMEX because of the benefits inherent within. Hotel Z doesn't take AMEX, so Joey goes elsewhere.
Billy doesn't like paying cash at the food carts, as they charge extra money to do so. He takes his business elsewhere.
Sammy is a penny pincher, and values his spending privacy, so he takes out $300/week to buy food and groceries. He can shop pretty much anywhere, but has to deal with change, having the cash on hand, etc.
All provide some advantages, and some disadvantages. Nothing about CurrenC says antitrust. Nothing about Apple Pay says it's any better than cash for people that don't want an iPhone.
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Merchants
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Re: Merchants
That is why some businesses say Cash only or one place I know says cash/debit - no credit cards.
Most of this is gonna get wrapped up in a black-box terminal that the small guy pays a cut to a "payment processor" to deal with.
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I am curious about what the deal for these types of payments are, and what the differences between providers might be, along with, how long till the merchant gets the money. Credit card reimbursement used to take a month or more. That is an additional cost to the merchant, as money costs money.
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Re: Merchants
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http://techcrunch.com/2014/10/25/currentc/
QR codes are not secure. Visa, gimme chip-n-pin real-soon.
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Please, ffs Mike, do not cite WND. Wtf, dude?
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Never Trust Apple
http://en.wikipedia.org/wiki/2014_celebrity_photo_leaks
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Re: Never Trust Apple
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Prediction CurrentC will collapse
A big Holiday Data breach in any of the larger members may hasten the end.
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