Rite Aid drops support for Apple Pay, reportedly working on competing platform

Rite Aid pharmacy has mentioned that it is dropping support for Apple Pay across all 4,600 stores in the US. The drug store chain seemingly accepted the NFC-based payment solution when it debuted earlier this month, but subsequently pulled support earlier this week.

While the exact reason for the withdrawal of support for Apple Pay isn't known, leaked internal memos obtained by SlashGear indicate that Rite Aid is working on a payment solution that is similar to Apple Pay:

Please note that we do not accept Apple Pay at this time. However we are currently working with a group of large retailers to develop a mobile wallet that allows for mobile payments attached to credit cards and bank accounts directly from a smart phone. We expect to have this feature available in the first half of 2015.If customers attempt to pay for a transaction with Apple Pay, a message will prompt both customer and cashier for a different form of payment. Please instruct cashiers to apologize to the customer and explain that we do not currently accept Apple Pay, but will have our own mobile wallet next year.

The validity of the leaked documents wasn't authenticated, although in a statement to iMore, Rite Aid's public relations did confirm that Apple Pay was no longer supported:

Rite Aid does not currently accept Apple Pay. We are continually evaluating various forms of mobile payment technologies, and are committed to offering convenient, reliable and secure payment methods that meet the needs of our customers.

What do you guys think of Rite Aid's moves to block Apple Pay?

The clumsiest man in tech.

  • time to switch to Walgreens :)
  • So, their strategy is to do something later with other retailers and eliminate a high income demographic from paying conveniently because they want to keep a point in the transaction processing for themselves. Good luck with that and good luck getting this mobile wallet into the App Store.
  • They won't have any problems getting this into the App Store - the retail heavyweights behind CurrentC would surely ask the DoJ to take a look, and, unless Apple had a darn good reason other than "we don't want a competing payment system on our phone," the DoJ might listen. Sent from the iMore App
  • If the reason is purely because of "competing" payment setup and not because of technological constraints, then it stinks. The main purpose of the new NFC, chip&pin, etc. is to make purchases more secure while not making it significantly more inconvenient. Limiting choices because "it's my ball and I'll make up the rules as I want" is silly. This also goes for those establishments that only allow Apple Pay and not other competing NFC technologies (assuming same level of security). As a consumer, I want choice. All things being equally secure, priced, etc., I want to use what works best for me.
  • What competition?
    Enlighten me.
    Drink some coffee first. It is Saturday why start it off with a negative.
  • Um, Google Wallet for one. Posted via the iMore App for Android
  • I believe Google Wallet is not as secure as Apple Pay
  • You have a valid point, however I believe his comment was in reference to competition. Sent from the iMore App
  • With a Rite Aid, CVS, and Walgreens are close to me this decision makes my shopping choice easier. Now I only have to choose between two stores. Sent from the iMore App
  • Well cvs costs way too much. Rite aid has like half the products
    Was there ever a choice other than walgreens anyway? Sent from the iMore App
  • Price is going to drive me to a specific store, not method of payment. So for me this is not an issue.
  • Great point! Sent from the iMore App
  • LMAO...some companies just don't think! Sent from the iMore App
  • Don't frequent Rite Aid stores anyway.....won't be long before they go into administration I beleive.
  • I switched about $400 of monthly scripts/other purchases to Walgreens yesterday. They even gave me a $25 gift card for switching. Sent from the iMore App
  • So this would indicate another technology feverishly trying to come to market. The question is, who? Google? It would seem a likely candidate. This is a good market differentiator for Rite Aid from Walgreens but it's also incredibly risky. I hope they're getting paid to hold off for their sakes.
  • Probably that merchant exchange, since Google is already to market with Wallet. Sent from the iMore App
  • I'm not one to like a proprietary method to do something, as in ApplePay. But RiteAid is really stupid here. Am I supposed to think that their method to pay will be as secure and more to the point, anonymous, as ApplePay?
  • They re going with that stupid Mcx (whatever) mobile app that's going to launch next year. I think they re making all their retail merchants denied Apple and Goolge!! This kinda reminds me of Blue ray (PS 3 )versus HD player (Xbox)
    I think Apple is going slay! I can't wait!!
  • It's not 'proprietary' to a NFC-equipped payment terminal, it's a standard NFC-protocol payment, which is why Apple Pay works on any payment terminal that displays the generic NFC payment logo. As such, the part of the 'leaked-memo' stating Apple Pay transactions would be handled differently isn't possible -- they either take NFC or they don't.
  • ApplePay is proprietary, as I can't use it on an Android device (not for technical reasons). GoogleWallet exists on iOS, but can't use NFC as Apple doesn't allow it. Apple could allow some API's for ApplePay to get it on Android/WP8/BB10, but they aren't. Hence proprietary. This does push GoogleWallet as well, so it doesn't bug me too much, but that RiteAid is cancelling ApplePay after less than a week bugs me more.
  • You're very loosely using the term "proprietary" and wrapping around  Pay, which is erroneous.
  • What's proprietary is how an iOS device manages a users payment cards and handles a transaction, what is delivered to a payment terminal is a standard NFC protocol transaction. thanks though for stopping by ;-)
  • So, you admit what I said was right, then try a veiled "Oh, how does that foot in your mouth taste"? Do you know how to be mildly insulting? You'd have to say I was entirely wrong, and give some statement saying so. ApplePay isn't just NFC payments, it is exactly "how an iOS device manages users payment cards". Are you telling me GoogleWallet does the same "We don't track, and we generate a random card number so the other company doesn't have your CC number to get leaked" thing? You're wrong there, but what do I know, apparently I was just stopping by.
  • Sent from the iMore App
  • I'm not going to shop in any particular place because of how I can pay but I will not use specific ways to pay for each set of locations I'm in. It's cash, credit, or ApplePay (when I get it and only because it's there). Sent from the iMore App
  • Precisely. Rite Aid will just spend money developing this for no reason.
  • I didn't even know that rite aid still existed until I moved to Nyc 10 months ago. Luckily, I have my Walgreens and Duane Reade that supper my Apple Pay and Google Wallet if I ever chose to go android. Rite Aid, you re officially dead to me. :)
  • I’ts stuff like this that will delay or kill adoption of ’tap-to-pay’. How many apps will I have to download and configure so I can use the technology wherever I am? Security takes a back seat here. Convenience and ease of use will be the ‘killer app’ that makes this technology ubiquitous. Google Wallet has been around for more than two years now and it hasn’t exactly set the world on fire, regardless of Android fanboys telling us they use it ‘all the time.’ Apple Pay will suffer the same fate if retailers resist or have their own system to promote. I give this a year. If Apple entering the game doesn’t spark interest then you can forget about this technology. It ain’t gonna happen.
  • The so-called 'leaked memo' is bogus, I've read elsewhere it's NFC payments in general that Rite Aid has shut off, not Apple Pay specifically. To a payment-terminal, Apple Pay >is< a NFC payment, there's nothing that would filter it otherwise -- that alone invalidates the authenticity of the 'leak' to nothing more than a slow-news-day blog posting...
  • Not true, the vending machines close to me deny apple pay and Google wallet because they have an exclusivity agreement with the terrorist service isis. Or soft card. Sent from the iMore App
  • ...LOL...
  • Glad CVS and Walgreens accept it, because I will never shop at Rite Aid after this. Thank goodness most Rite Aids are becoming Walgreens around here anyway. Sent from the iMore App
  • CVS stopped this morning (Oct 25) Posted via the iMore App for Android
  • It's money. CVS just stopped taking tap payments today. My pharmacist's son works for a card processor and EMV and one time transactions cost 40 cents each, passed to the merchant. All these companies are trying to renegotiate rates before resuming tap to pay. Posted via the iMore App for Android
  • Isn't there also a merchant-paid-transaction-fee for credit card use? That's why most AM/PM's (in LV & CA) don't take Credit at all, or they charge a fee.
    -I don't go to those stores.
    I'm not going to make ApplePay my exclusive payment of choice yet, there are too few merchants. But I will one day.
  • I don't even like Rite Aid their stores give me a bad vibe (the feng shui). Apple Pay may have got me to go there, just to try it. Now I'll continue going to Walgreens, CVS when no Walgreens is nearby.
  • Walmart FTW!!! It's cheaper than all of those stores!!! hahaha --- but I don't think they support aPay yet.
  • I'm going all in with Apple Pay. If a chain won't accept it then I won't shop there. Cash for small local shops and farmer's markets, Apple Pay for everything else. This is going to be fun over the next year as merchants have to upgrade their point-of-sales devices.
  • Looks like Rite Aid is going to loose a lot of customers, time to start selling shares! Sent from the iMore App
  • I understand if they intend to launch a competitor. It's logical and it's business. That said unless they are truly working with "a LARGE group of retailers" theirs won't work. because people will go with what's most widely accepted. Granted Costco doesn't take Visa Credit and they do very well. but business is business, consumers will adjust and if RiteAid offers what you need at the most convenience people will go regardless. Right now the problem with Apple pay is the last 4 places i've tried to buy something don't accept it. Ralphs, H&M, Albertsons, Safeway. I don't care how many drug stores they sign up. I don't shop at them cause they are overpriced.
  • Those exec's are probably sporting a Zune as well.....
  • From what I understand, a lot of retailers such as Rite Aid, are losing big bucks over NFC payments. The issue is demographics, much like the way Google works, retailers need to build demographics of their customers to sell ads and shelf space to products. NFC payments remove the demographics and data collection from the registers and therefore cut into their bottom line. Demographics are big business and constitutes as much as 50% of a retailers annual profits. The consumers data is being sold at alarming rates these days. I think we are going to see a huge battle over the next few months or years with retailers, banks, and NFC tech all trying to promote the method that best profits them. This is the reason we have seen such a difference in ApplePay adoption between banks and retailers. Banks, with extremely high adoption rates, love the idea that CC fraud is reduced if not eliminated because it saves them millions every year. Retailers, with extremely low adoption rates however, are not fond of the anonymous purchase system, because they loose millions in demographic income. The problem is that us consumers are ultimately the ones that will lose out. As Apple, and even Google now, continues to push for consumers privacy, convenience, and safety, the retail industry is going to start pushing back to maintain their gains. Everyone wants their share of our funds and Rite Aid thinks they are even entitled to it. I hope that us consumers will speak up with our actions of not folding to these retailers. If your using an Android device than demand acceptance of Google Wallet. If your an Apple user than demand acceptance of ApplePay. NFC is here and in the best interest of the consumer, don't let it be pushed out by retailers. Sent from the iMore App
  • Excellent point.... but, You think Google Wallet is anonymous? I haven't reasearched this at all, but I always assumed your purchase history went straight into Google's hands. And if anyone knows how to monetize this information, it's Google. I also have no proof that Apple isn't doing the same thing, but they have a history of NOT doing as such. Tim Cook, "We're not in the business of selling your personal data."
  • CVS just stopped taking any NFC payments as of this morning. So the choice is clear which pharmacy store to use- Walgreens. Shooting themselves in the foot big time as I have seen many many comments people wont be shopping there anymore- iphone AND android users- which only make about 98% of the mobile market total *rolls eyes* This CurrentC standard sounds ridiculous already, even if backed by the biggies like Walmart and Bestbuy. Its like having a savings account you hook your debit card/bank account to and cuts out the credit card companies. So you damage your credit score not utilizing credit, and you have hooks to all of your cash for hackers (instead of a fake token like Applepay uses than cant be used again). Great plan guys! I will NOT be using that system. Reason being is they want to cut out the credit card companies, since there is usually a fee per purchase they pay to credit card company/processor for the ability running cards (in the cents). Again, many problems with cutting out credit cards. MANY people use credit to buy something they cannot afford in cash right now (not that this is the best financial practice but is the biggest use of credit). Second, many cards offer perks to use them. I get 2% cash back on all purchases, and 5% in certain categories on my business card. It adds up- I get back $20-40 per month not spending a whole lot. And I pay the card off in full every month and have never paid a dime of interest; so I'm winning in the end. The Coscto not taking credit cards and people will adjust example is completely different. People already bought a membership there so of course they will adjust. Second, there are far far fewer places like Costco to go than say a CVS or a department store with the next one at the next corner. Sam's Club doesnt take credit either, so there really is nowhere else to go that does and get bulk items. The comment that NFC costs more is incorrect as well. It is just running the card, and the processing fee is the same as if swiped; there is no difference. This is completely anti-competitive in nature; see the Macrumors about CVS stopping, their corporate note directly says the reason as we will have our own payment system in 2015 (CurrentC). As much and iphone users hate Android users and vice versa, nothing pisses both camps off and unites them more than screwing everyone over for anti-competitive reasons. At the end of the day these businesses are going to lose money, period. And they are still going to have to take credit cards in some form or else people WILL go elsewhere, mark my words on that. So if you have to take credit then why not NFC too? Pure anti-competition. I already see many many comments daily from people who wont use these stores again (especially the ones PURPOSELY cutting off NFC payments when they can take them). I also think this Current C standard will completely flop due to the reasons stated above and everyone will be accepting NFC next year (plus the fact that all credit cards much use chips by October 2015 by the feds)
  • Your post was better than the article. Why you no blog?
  • With as much fraud as we've seen in recent years, you would think that all retailers would welcome a more secure payment method. Everyone is affected by card fraud; the consumer, retailer and financial institution. So, one could argue that by denying the use of a more secure payment option, these retailers are in a sense welcoming fraud. It's definitely an intriguing argument--and I'm fairly certain if someone were to argue it well, it could potentially prove a violation of merchant card servicing ToS. Sent from the iMore App
  • They would rather risk fraud and hacking because they would lose too much money with anonymous payment methods such as ApplePay and Google Wallet. If they can't sell customer demographics built from customer purchases then they will lose millions. Sent from the iMore App
  • I think the real issue is that everyone is trying to make money off NFC payments. That's the wrong approach. This stuff should just be standardized legally. It's only going to hurt the user in the long run. I understand technology like this costs money, but it's the tax payer that will benefit from it more if there is just one standardized method rather than some exclusive club you have to belong to. Apple will benefit from this because they're offering the service at a nominal fee to everyone else, but that sucks for businesses and banks. The inherit value is really to gain repeat shoppers. That's where it is; you offer this, people will shop there more. But that's not how is SHOULD be (IMO).
    Personally, being a lifetime Midwesterner, I have no idea who Rite Aid is so it's of no concern to my immediate future purchasing. But the fact that now everyone has to have their own mobile payment method is just going to be silly. It's not going to benefit the customer at all.
  • I agree with you to a degree. I think Apple and Google (windows and blackberry if they want to get in on it) are exactly the companies that should be leading and benefiting from a "mobile" pay system. It is only right that they make money off of the purchases that are being made with their software and since they will be the ones who will ultimately be held responsible for any fraud it may bring. The retailers had their chance to control the consumers data and failed miserably with all the data breaches. They (retailers) are not taking customer data seriously and I will no longer put my faith in any method they develop. What this all comes down to is that they (retailers) are unhappy that Apple and Google cut them out. They can no longer create demographics of their customers which will cost them millions. Sent from the iMore App
  • The year was 2007. All carriers refusing exclusivity with the first iPhone. Except...AT&T. Jump forward to 2014. All major carriers now carry the iPhone. Just give them time. They will eventually realize. Sent from the iMore App
  • Can CurrentC be part of the ApplePay wallet? That would seem to be the great compromise here. I want Apple security. I don't care who makes the behind-the-scenes transaction money.
  • The problem with this theory is that Current C is not an anonymous payment method and will transfer a large amount of Data to the retailer such as customer purchase history, residence, age, sex, etc. ApplePay does not work that way. ApplePay eliminates retailer demographic building by making payments anonymous. If retailers can't sell your info to manufacturers then they lose millions. Sent from the iMore App
  • I was in a Rite Aid two days ago. I asked if they accepted Apple Pay and I was told by the cashier that they are in the process of getting set up for it Sent from the iMore App
  • I think this is short sighted. Haven't these retailers seen how poorly ISIS/Softcard has done? The retailers will use this new system, no consumers will adopt it, and they'll all be accepting Apple Pay a year from now.
  • I know that it's a Saturday and all but I come to iMore because, 9 times out of 10, you guys deliver good news. Right now, I'm getting more information and better articles about the topic in the comment section. This article is far behind the actual news surrounding Apple Pay. It's as if this article was written several days ago =|
  • I guess I won't be shopping at Rite Aid anymore!!! SMH Sent from the iMore App
  • A very bad business decision - it's not like Apple Pay is exclusive. Rite Aid can have their own AND Apple Pay AND Google Wallet AND... Sent from the iMore App
  • Now I will NOT go to CVS or RiteAid no matter how conveniently located they are. We do not want to carry a credit card, but will not tie our bank account to any store system. ( Sounds like Lowes and Wendy's are doing the same thing. ) We wanted to get rid of carrying credit cards. This will slow that down.. Plus having us abandon stores we use. BTW will someone post email addresses to these stores so we can comment directly to them?
  • There will be more... Just wait. Posted via the Android iMore App!
  • Boycott CVS & Rite Aid
    Apple pay is the quickest, fastest, most secure and easiest form of paying for an item in a store I have seen. I do not agree with these stores that are now disabling their NFC systems to not accept Apple Pay. I think they are cutting off their respective nose's to spite their face.
    (1) Apple pay would drastically reduce time spent in line. Because every time I have used Apple pay so far in the 6 days since it's initiation it only took 2 seconds max to get an approval and a receipt on apple pay.
    (2) It is not good business sense to piss off your customers.
    (3) Since the majority of I-Phone 6 and 6+ owners usually have a higher buying power. These merchants will be left with only the poor patronizing their stores.
    (4) It however, seems that they are mostly after the poor with the adaptation of the MCX or CurrentC system they want to utilize. Since this will give them direct access to peoples bank accounts. I'll be damned if I will give them access to my account.
    (4) It would not be so bad if their current system did not allow for the use of Apple Pay. However it does because it is the NFC system. Both CVS and Rite Aid's system accepted payments by way of Apple pay for the first three days of this week. Now to willfully disconnect the machines from the NFC system to me is malicious. This shows little disregard for their clients and prospective clients. (Their machines now say " We do not accept Apple Pay") That had to be programmed into the machines.
    I am suggesting a boycott of these two stores. Since I know for certain they accepted apple pay and then and now refusing. It is a simple and easy boycott see link http://youtu.be/9ZHusVNa1_A
  • I'm pretty sure "the poor" are not the target market of any NFC wallet system.
  • Also, CVS did work using Apple Pay when it first came out, however it has been nixed from the registers.
  • Apple Pay seems more-or-less like Apple's other products - it's meant to be convenient to consumers. It also offers benefits to merchants and consumers, such as greater fraud protection than simply swiping your card at the checkout terminal. The "solution" that Rite Aid and CVS (CurrentC) is going to use was created by merchants and are designed to serve merchants, first and foremost. If CurrentC happens to serve consumers, that might be great, but it's easy to see a scenario where they will keep it out of the hands of smaller merchants. Not that smaller merchants are taking Apple Pay now, but Apple will ultimately need them if Apple Pay is going to be successful. CurrentC may not need or even want them. (Let us also pause for a moment to reflect on the fact that Apple is keeping competing NFC wallets like CurrentC and Google Wallet off of iPhones - at least for now.) It's pretty easy to get cynical about this, but I would still much rather see Apple Pay (or even Google Wallet) succeed over an e-wallet that's backed by retailers. They're not owned by either retail or by banks, and that's going to give them much more credibility than CurrentC. Now if we can only get Apple to allow competing other e-wallets...