Major retailers are beginning to rethink their use of Apple Pay – Apple’s new credit card processing system – and several of them have already stopped accepting it. Two of the more notable outfits to reject Apple Pay include Rite Aid and CVS, whose decision to do so has led to confusion and dismay among customer over what the latter sees as a restrictive payment environment. But the glaring question that hangs over the entire issue is ‘why?’ – why are so many major retailers pulling the plug on Apple Pay before the system even has a chance to get its legs under it?

Reasons for Rejection
Mobile payment technology in general has come under intense scrutiny since its introduction into the public sphere and Apple Pay has largely served to fan the flames of vehemence. There are essentially two reasons for this. The first is that retailers are unhappy about the fees they are required to pay for the privilege of using the technology which can often be as high as 3 percent per card swipe.

The second reason is that retailers like collecting customer data for marketing and retention purposes but the nature of Apple Pay is such that it doesn’t allow for such data collection. 

There are other reasons that this technology has become overwhelmingly unpopular with retailers but those two seem to be the most common. The second reason is a particular point of contention because companies thrive off of the ability to collect information about their customers and their buying habits. This kind of information effectively steers their marketing efforts and allows them to cater to individual customers in terms of loyalty programs and other incentives that help retain current customers and attract new ones.

Apple Pay, however, was specifically designed to not only refrain from collecting customer data but to disallow anyone else from doing so as well. For example, many restaurants and retailers currently either asks customers for a loyalty card or request a phone number when they pay. Panera Bread Company is one restaurant that is particularly displeased with the technology as it relies heavily on customer loyalty via data collection. The company’s MyPanera Rewards program, however, is effectively rendered moot with Apple Pay in place. 

To learn more about Apple Pay, contact us at 866-944-3244 or sales@servistree.com. Keep up with the latest news and information on credit card processing and mobile payments along with other small business news by subscribing to our blog by clicking here.