Consumers to decide which Mobile Payment scheme is better

Recently two pharmacy chains decided to stop the facility of Apple Pay at their stores for consumers. This might be the initialization of an upcoming battle in the world of mobile payments. This event has triggered a war between the QR code-based apps and options such as the Google Wallet or Apple Pay.

On one side huge retailers like Walmart and CVS have agreed to implement Merchant Consumer Exchange’s (MCX) QR code-based app whereas on the other side we have the recently popular Near Field Communications (NFC) options like Google Wallet or Apple Pay.

MCX has approximately 50 retail partners including Target and Best Buy, which process roughly one trillion dollars in annual sales. The Apple Pay feature also has a great catch: its system is extremely simple. All you have to do to use it is to place your iPhone 6 near a NFC device. The service saw 1 million credit cards enrolled in the first 72 hours since it was released.

Considering this debate, experts and analysts still believe that consumers are the ones who would decide which technology or feature is here to stay and which becomes obsolete.

This skirmish will go on for a while, but ultimately it seems shortsighted to tell customers that you can’t use their competitor’s alternative. The baseline really is the credit card. The process of using one is still very easy, so everything compares to that.” – Matt Schulz, industry analyst

Other analysts are of the view that though MCX group is strong but all retailers should offer the NFC option to their clients or they would end up losing sales and customers both.

Another point of interest is that retailers would always prefer the MCX payment method because credit card companies cut into the retailer’s profits to add an extra 2%, often the very margin at which most stores operate.

CEO of Thanx, Zach Goldstein also believes that the risk of losing clients over a clunky mobile payment is not an option for companies.

“Friction is a challenge with many loyalty programs, and if a customer forgets about you often there’s little you can do to get them back. The math all retailers will be doing is that is it worth saving money on credit card fees at the risk of losing a customer who thinks your mobile payment is too cumbersome?”

For retailers and most companies, the decision is still quite ambiguous whereas clients can be the ones to drive which payment plan suits them the best and eventually businesses would have to accept and believe in the notion that “The customer is always right”.