Apple Pay or MCX? The Payments Battle Begins.

Merchant coalition members cut Apple Pay out of the payments loop after hundreds of credit unions signed on.


Apple Pay has garnered more than a million activations within three days of its launch. Meanwhile, a coalition of major retailers has declared war on the newly minted 800-pound gorilla of mobile wallets, and credit unions have some skin in this game.

That’s because several hundred credit unions already have signed on to the swipe-and-pay solution embedded in the iPhone 6 and the newest iPads, even though it’s expected to be months before they can offer the app to members.

Meanwhile, pharmacy heavyweights Rite Aid and CVS have disabled their NFC systems, orphaning Apple Pay and Google Wallet alike, apparently in favor of the CurrentC service from the Merchant Customer Exchange.

MCX is also backed by Walmart, Target, Best Buy and dozens more major brands. That mobile payments service will rely on QR codes at first, according to published reports, followed by Bluetooth as it heads toward a nationwide rollout next year.

And it uses ACH to avoid card interchange fees. Meanwhile, credit union insiders say Apple will take a 15 basis point cut per credit transaction and about a third of that for debit transactions. And that’s non-negotiable.

MCX in a blog on Wednesday said merchants choose on their own whether to offer CurrentC, but reiterated that it’s an exclusive relationship. One or the other.

QR codes and Bluetooth may not be able to compete with Apple’s heft and hip factors. While Apple Pay had an initial hiccup as Bank of America double charged about a thousand of its very first users of the new payment play, that proved to be a small bump in the road. The big bank took ownership of the error and CEO Brian Moynihan touted the 150,000 enrollees it got in the first 24 hours after launch.

NCUA Board Member Rick Metsger acknowledged in a speech last week that most of the initial commitments to Apple Pay have come from credit unions. That’s unusual for a space not known for taking the lead en masse in leading edge tech tools.

But there is a sense of urgency. The industry has been telling itself it needs to keep up to survive, much less thrive. (Nearly all the CEOs surveyed by Fiserv at its recent credit union client conference said “an expanded mobile footprint” is a priority, far outpacing social media growth.)

 “You’re only relevant if your customers love you,” Apple CEO Tim Cook told the Wall Street Journal this week. So what will consumers love more? Their favorite brands or their iPhones? And does the payment channel matter that much to them?

The market will decide. Credit unions may well find a way to support both MCX and Apple Pay. And they might need to.

Apple Pay and MCX are sure to be major topics at the huge Money 20/20 payments conference next week in Las Vegas. Watch the Off the Cuff section at and follow @RapportCallahan on Twitter for updates during the show.


Oct. 30, 2014


  • The battle is already over. MCX has already been hacked and is plagued with problems.