Mobile payments is such a new concept that many in the media continue to inaccurately report what happened this week between Apple Pay and CVS. Here’s what really happened, and why, no matter what, Apple wins, some experts say.

There have been some reports that cite sources close to MCX who describe a mobile payments checkout process that requires several steps and two bar code scans. But MCX has not released a final product and has been hush-hush, so only time will tell. Apple Pay requires only one touch of an iPhone’s home button.

“MCX could streamline its payment system by leveraging the Apple Passbook mobile wallet and the development tools that are available through Passbook,” says Rick Oglesby, senior analyst at Double Diamond Group, a payments consulting firm whose specialties include mobile payments. Passbook is Apple’s mobile wallet app, which retailers and other organizations can integrate with to store loyalty cards, event tickets and other “passes.” Passbook is also the hub of Apple Pay, storing credit and debit cards.

Apple Pay and NFC represent just one component part of Passbook. Those that wish to compete with Apple Pay will have to do so through Passbook; stand-alone apps won’t be good enough, Oglesby says. So Apple wins either way because it brings consumers and capabilities that can’t be accessed anywhere else.

“This isn’t about retailers versus Apple, it’s about retailers versus payment networks fighting over how they will access Apple’s customers. If you think about it that way, it’s pretty clear that Apple is in the best position. These retailers consider the payment networks to be unnecessary and expensive middlemen.”

Internet Retailer, October 28, 2014
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