Best Buy Will Accept Apple Pay, First Defector From Rival Payments Alliance
The electronics retailer gave a major boost to Apple’s mobile payments system, even though it’s a founding member of a competing payments alliance.
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Best Buy said today that it would start accepting Apple Pay in its app immediately and in stores laster this year, a major win for Apple in the battle over who can build the most popular mobile payment system among both customers and retailers.
Best Buy is one of the biggest retailers to join Apple Pay, and the first defector from MCX, a consortium of merchants including Wal-Mart, CVS, and Best Buy, that formed in 2012 to build a mobile payments app that avoids costly credit card interchange fees and allows merchants to keep more data and integrate gift cards and branded credit cards.
“Today's consumers have many different ways to spend their money and we want to give our customers as many options as possible in how they pay for goods and services at Best Buy,” the company said in a statement.
The MCX consortium seemed to accept the move from one of its founding members. “Best Buy remains a strong MCX partner and supporter of the CurrentC initiative,” MCX chief operating officer Scott Rankin said in an e-mailed statement. “We understand – and strongly support – our merchant partners' quest to do what's best for their customers. As we have stated in past, we are of the firm belief that there need to be at least 2-3 major players within the mobile payments ecosystem for it to succeed.”
While Apple Pay is planned to be rolled out in its stores this year, it's not clear if or when the rival payment system being tested by MCX will make it to Best Buy. Jeffrey Shelman, a Best Buy spokesman, told BuzzFeed News: “Best Buy remains part of MCX. We will actively monitor CurrentC pilots. It is too early for us to speculate on timing.”
MCX released a pilot for its CurrentC payment application last year and said it will roll out more fully later this year. The consortium was first formed in 2012.
While Best Buy is the first mega-retailer to say it will accept Apple Pay, the country's biggest retailer, Wal-Mart, told the Wall Street Journal in March that it was “open” to Apple Pay.
When Apple Pay was first introduced in October, two MCX members, Rite Aid and CVS, disabled the technology on their scanners that allows Apple Pay to work to comply with MCX rules about exclusively using their own technology.
Best Buy did not say when it would start accepting Apple Pay, meaning that CurrentC could still roll out in its stores. Best Buy is a major seller of Apple products.
“The number of locations accepting Apple pay has tripled and we continue to see great progress with merchants,” Apple chief executive officer Tim Cook said on a call with analysts to discuss the company's second quarter earnings.
Adding Best Buy fully will be a major coup for Apple. While it has a wide range of merchants signed up for Apple Pay, it does not have any of the mega-retailers that are part of MCX.
Best Buy, with its $36 billion in annual U.S. revenues far outpaces, for example, the $13.7 billion in annual revenues at Whole Foods, an original Apple Pay partner.
With the introduction of the Apple Watch, millions of consumers will be able to make payments from their wrists, which could be more convenient than having to pull out their iPhone or their credit card.