Apple Pay is gaining more ground.
Best Buy announced Monday that it will soon accept Apple Pay. It’s a total about-face, as Best Buy and the consortium of major retailers it helped to form, called Merchant Customer Exchange (MCX), actively resisted Apple Pay just six months ago in favour of their own mobile payment standard, CurrentC.
MCX resisted so strongly, in fact, that some companies making up the consortium made the effort to disable the near-field communication (NFC) functionality on their card readers from accepting Apple Pay.
Apple Pay isn’t a runaway success, at least not yet. As of March of this year, only about 20% of iPhone 6/6Plus owners had even tried Apple Pay, according to anti-fraud startup Trustev. But CurrentC isn’t even available yet, which automatically puts Apple Pay in the lead.
Best Buy isn’t the only major company to get on board with Apple Pay. Discover, the only major US credit card company not currently on Apple Pay, also announced this week that it will be compatible with Apple Pay this fall.
Best Buy and Discover’s reversals show that if retailers and credit card companies want to stay relevant, they need to work with mobile payments systems. It also reveals that there’s little room for standards that can’t compete in the most important areas, such as security and convenience.
So far, Apple Pay is king of the hill, but it’s not without its shortcomings. To use Apple Pay, a retailer’s payment terminal needs to be compatible with NFC. Several retailers already have NFC-capable terminals, but older terminals without NFC functionality are still widely used. Yet, this is likely to become less of a problem as retailers update their terminals over time.
Meanwhile, Samsung Pay is reported to arrive this summer. It’s major draw will be its compatibility with Magnetic Secure Transmission, which is the traditional magnetic strip reader used by almost all credit card terminals. Only a small fraction of terminals have NFC-compatibility. But Samsung Pay will only be available on Samsung’s newest flagship devices, the Galaxy S6 and S6 Edge.
Google is planning its own new payments system too, tentatively called Google Pay. Google is expected to show off Android Pay at its Google I/O conference in May.