Best Buy and Discover just moved into Apple Pay’s camp.
Could these wins for Apple Pay mean that Cupertino is emerging as the winner in mobile payments and that more players, particularly major merchants, will inevitably follow? Not necessarily, but that doesn’t mean they’re not big deals.
The addition of Discover means that the last major payment network is now part of the Apple Pay ecosystem. Discover is not only a payment network — it is a depository institution with more than $75 billion in assets. It will turn on its Apple Pay capabilities this fall.
Apple Pay already has 2,500 banks on board its mobile payments system, which exacts a hefty toll from its banking partners.
Meanwhile Best Buy, which had switched off NFC at its registers in a high-profile snub of Apple Pay six months ago, reversed its position yesterday. This announcement was part of the theatrics on Apple’s earnings call, and a good political play by the big-box store. The move is significant because Best Buy is a member of MCX, the merchant-led mobile payments initiatives using ACH payments to help merchants avoid fees from the card networks. All of Best Buy’s point-of-sale devices are now being upgraded to NFC, said payments expert Brian Roemmele.
Cherian Abraham, who follows payments for Experian, points out this does not mean that other merchants will necessarily follow:
It has been known for a while that as the exclusivity arrangements a number of merchants had with MCX expire mid-2015, that these merchants and others had been advocating a more inclusive approach towards payments acceptance. In that light, It is important not to view merchants as a heterogenous block, painted over casually with the same brush. MCX represent a vocal mix of committed merchants who share a common purpose and a refrain of imbalance in the relationship with networks and banks.
MCX and Apple Pay are not competitors, Abraham said, nor do merchants view them as such.
One thing to understand is – For a merchant, accepting Apple Pay or NFC is a tactical step. Building MCX or equivalent, is a strategic one.
— Cherian Abraham (@cherian_abraham) April 27, 2015
Discover needed a win, Roemmele said, and the Apple Pay announcement gives it that. Discover’s future is uncertain, though it may see some suitors soon that could benefit from a network. Google, Facebook, and perhaps most likely, a soon-to-be-independent PayPal, could all benefit from owning a network, though it would bring regulatory issues.
For now, though, the news is all Apple, and everything seems to be falling Apple’s way.