CVS Pulls the Plug on Apple Pay

Only the latest to nix mobile payments

Just days after Rite Aid discontinued its use of Apple Pay, CVS has followed suit. The pharmaceutical company announced on Saturday that it would no longer accept payments through Apple's new system, according to USA Today.

CVS told The Washington Post that it "cannot accept Apple Pay" or other technology, likely due to its involvement with other mobile payment technologies. Most retailers are invested in CurrentC, a mobile payment system developed by Merchant Customer Exchange (MCX), to scan QR codes linked to customer accounts. MCX is backed by big-name brands such as Target, Gap, Dunkin' Donuts and 7-Eleven.

Apple Pay uses an NFC chip, instead, which is not compatible with CurrentC's QR codes. That limitation caused Walmart and Best Buy, both of whom are partners with MCX, to bypass Apple's new system from the start. One advantage of CurrentC? It's compatible with retailers' existing payment terminals. If retailers switch to Apple Pay, they have to invest in new ones.

Meanwhile, MCX continues to develop a mobile payment solution, loosely expected to launch next year. If it succeeds, retailers will be able to circumvent the 2 percent to 3 percent transaction fees they currently shell out to credit card companies.

According to Apple, more than 220,000 stores accept its new payment system, which is available only to users of the iPhone 6 and 6 Plus. If customer demand grows for Apple Pay, these companies could reconsider their decision.