You may want to pay for things using Apple Pay at Walmart, but it doesn’t seem as though it’s going to happen. At a recent Money2020 conference, Walmart Executive Mike Cook asked Visa exec Jim McCarthy about the cut of each transaction a credit card company gets when you pay with a card. In essence, Walmart wants to know why an in-app purchase is different from Apple Pay. To dive a bit deeper into the problem, Walmart wants to know why Apple Pay transaction fees are lower than CurrentC, which Walmart backs.
Walmart considers the transaction fee a company like Visa gets to be too high. The lowest fee any transaction qualifies for is called a “card-present” fee, which means the card is present and accounted for, so no additional re-routing need be done, digitally speaking. You swipe, card reads, bank issues fees, and takes their cut.
CurrentC, which Walmart backs, pipes right into your bank account to draw fees; essentially a clumsy debit card app. Re/Code reports that MCX’s CEO (MCX owns CurrentC) says the app will support credit cards on launch, but wouldn’t offer up which ones.
It’s likely Visa won’t be in that mix.
Earlier int e conference, McCarthy explained that Apple Pay transactions typically qualify for that card-present fee — the lowest you can get. Walmart is essentially arguing that Apple Pay transactions aren’t technically card-present.
Walmart is completely dismissing the security features that qualify Apple Pay for that fee.
Basically, Walmart thinks their CurrentC solution should have the same fee structure as Apple Pay because neither have a physical credit card present. Visa’s McCarthy is trying to explain why that can’t be (back-end haul, etc.), but Cook wants none of it.
The video is available via the source link below, displaying a tense standoff between an executive form a major retailer and another from one of the largest credit companies around. The strained interaction, and total divide about card transaction fees, technology, and how they relate to apps, serve as the reason we should never expect to see Apple Pay at Walmart.
It’s not Visa, or Apple — it’s Walmart creating the divide, here.