At a recent payments conference, Mike Cook, head of Walmart’s payment business and a driving force behind MCX and CurrentC, took the opportunity (from the audience), to quiz Visa exec Jim McCarthy (on stage) about Apple Pay being afforded the lowest possible fee, the so-called “card present” fee.
Before you watch the video (part of this re/code article), a bit of background. As the name implies, card present means the credit card being charged is actually in the store, as opposed to the higher priced card-not-present fee that applies for typical in-app payments. The thinking goes, if the card is physically present, there’s less of a chance for fraud. EMV (mentioned in Jim’s first answer) is the chip part of the chip-on-card credit card solution.
There’s a lovely bit of human dynamic here. You get the sense that the people on the panel are used to Walmart’s Mike Cook grousing about Apple Pay, that this is all a bit of an inside joke at this point.
That dynamic aside, this is an excellent discussion of the primary issues faced by MCX. Why does Apple Pay qualify for the lower card-present rate when the QR-code solutions, like Level Up, do not? Obviously, the answer is security.
“never, ever, ever” — noted, with a chuckle.
It’s “never” until money becomes the issue. 😉
The title doesn’t match the content. Why would they “never”?
To answer the one question posed back to the audience about a CP transaction in-app: “CP transactions exist when the same mechanism is used in-app as is done at a terminal: Apple Pay.”
The fact they’re basing it on the data received is a clear indication they are out of touch and not ready for the new wave of tech.
It’s was a loaded agenda driven question. In-app Apple Pay isn’t less secure than a CP because still the merchant isn’t storing any private vital customer and or payment info, yet still requiring biometric authentication per transaction. The reason in-App Apple Pay is not CP yet is because it’s nascent and not a EMV standard but slated to be. Still as is way better than what is being offered.
There’s also some duplicity, because he’s pushing that CurrentC get the same treatment as CP fee as Apple Pay does at a physical location. When QR-payment is so further away from CP than in-App Apple Pay. So you can imagine how far advance is Apple Pay’s payment security and frictionless for at location payment is compared to CurrentC.
Side Note – I’d be surprised that iTunes stored CC# isn’t slated to be purged and tokenized in the near future, to further boast safety and security, if hasn’t been already.
Walmart destroys lives. Don’t shop there. You can buy anything that Walmart carries in any of a number of stores for very comparable pricing.
Well that is embarrassing for Walmart. EMV transactions are more secure (nothing is perfect) than non-EMV. This is why fraud has moved heavily to the US from EMV markets like the Europe and Canada.
Secondly, currently in both cases (EMV vs non-EMV) this financial institution would likely be responsible for any fraud which means higher vs lower fees. Level Up is non-EMV, therefore higher fees.
Basically the fees are an insurance policy. If you smoke or us QR codes then you pay more for the insurance.
What’s necessary to handle it, other than NFC support? Walmart Canada probably already supports it.
It’s a loaded debate because it avoids the bigger issues. MCX has already been attacked. Plus info privacy concerns etc. I don’t want to get Best Buy spam about fitness videos because they had access to the fact that I bought diet pills at CVS. But Mike has failed to address such an issue. Instead he pushes the discussion to focus on other issues.
And I agree that as Apple Pay moves forward they may remove the stored payment info. At least in terms of having the literal card and not an alias number.
Walmart’s Mike Cook is the reason why I will never, ever, ever shop there again.
The ironic thing is the move to secure payment systems like Apple Pay will lower Walmart’s processing fees.