CurrentC, an Apple Pay Rival, Gets Hit by HackersCraig Giammona
CurrentC, the retailer-backed mobile-payment system touted as an alternative to Apple Inc.’s platform, was hacked during a test of the technology, resulting in some e-mail addresses being stolen over the past 36 hours.
Merchant Customer Exchange, or MCX, the retailer group that is running CurrentC, was attacked by hackers because it’s challenging the status quo in the payments industry, Chief Executive Officer Dekkers Davidson said.
“Our systems have been attacked repeatedly in the last seven or eight days and have withstood far more significant attacks,” Davidson said during a conference call with reporters. “Any kind of attack or incident is one you have to learn from and get stronger.”
The attack represents a black eye for a coalition that’s working to win the trust of consumers and gain an edge over the Apple Pay system. CVS Health Corp. and Rite Aid Corp., part of the MCX group, stopped accepting Apple Pay last week, putting a spotlight on their support for CurrentC.
CurrentC is slated to debut early next year and won’t be delayed by the security issue, Davidson said. The system will let customers buy items with their phones by scanning QR codes.
The breach itself appears to be small, but there’s a risk that consumers weary of data hacking will be turned off before the new platform goes live, said Todd Ablowitz, president of Double Diamond Group in Centennial, Colorado.
“If you’re launching a new payment system, you have to project a sense of security and gain confidence,” Ablowitz said in an interview. “If I was in charge of MCX, I’d be worried about how it appears to the typical consumer.”
Davidson, in the call with reporters, declined to say how many e-mail addresses were taken and didn’t specify which retailers were testing MCX. The system is the “initial phase of implementation with several merchants,” Davidson said.
Apple Pay, which was unveiled earlier this month, works with new iPhone 6 and iPhone 6 Plus models. It lets customers swipe their phones at a store, instead of using a plastic card. Apple is aiming to gain wide acceptance for its payment system - - something that has eluded previous efforts by Square Inc., Google Inc. and Softcard.
CurrentC, meanwhile, is supported by Wal-Mart Stores Inc., Best Buy Co. and other retailers. They’re looking to cut down on transaction fees paid to the credit-card companies and to give stores more control over customer-reward programs. CurrentC would be linked with a customer’s debit-card account or a store credit card and require shoppers to scan QR codes -- bar-code-like symbols that phones detect with their cameras.
At stake is a mobile-payments market will grow sevenfold to $90 billion in 2017 from $12.8 billion in 2012, according to Forrester Research Inc.
While Apple is banking on its customers to pressure stores to accept the new payment technology, the retailers see an opportunity to change how people make purchases, said Gil Luria, an analyst at Wedbush in New York.
“It’s going to take more than a few customers complaining for them to basically agree that Visa and Mastercard are to control the payments infrastructure for another 30 years,” Luria said in an interview. “I don’t know the last time somebody’s been successful bullying Wal-Mart.”