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In a Reversal, Apple Pay Will Hit Best Buy Stores in 2015

In a Reversal, Apple Pay Will Hit Best Buy Stores in 2015

By Mike Isaac, The New York Times | Updated: 28 April 2015 18:09 IST

For most consumers, paying for things with a wave of the smartphone is still a novelty. But many major retailers are clamoring to prepare for what could be a substantial change in the way we buy everyday items.

Best Buy announced Monday that it now accepts Apple Pay payments for purchases made inside its smartphone app, and by the end of the year will accept payments made in its brick-and-mortar stores using the Apple Pay mobile wallet.

A Best Buy spokesman said in a statement that the electronics retailer wanted to give customers as many options as possible in how they pay for goods and services. The company also plans to open a technology innovation office in the Seattle area to work on mobile technology issues, the spokesman said.

That is a sharp reversal from just a few months ago, when Best Buy, along with other major retailers like Rite-Aid and CVS, abruptly shut off the ability to accept Apple Pay payments in their retail stores.

The issue was not whether these companies want a mobile wallet to catch on. More than 50 retailers, including Wal-Mart, Best Buy and Gap, started working together years ago to develop CurrentC, a smartphone-based payments product still in development.

(Also see: Apple Pay Shunned by Some US Retailers Eyeing Rival Payments System)

The hope was that for members of the consortium, also called the Merchant Customer Exchange or MCX, accepting mobile payments through their CurrentC app could be a way to help retailers understand more about their customers' shopping habits and, potentially, let merchants avoid the high fees they pay when processing credit card transactions.

However, when Apple Pay made its debut, MCX retail partners were contractually bound not to accept alternative mobile wallet payments, according to two retailers involved in MCX, who spoke on the condition of anonymity because the details of the partnership are private. That meant that even though the CurrentC product is still unreleased, partner retailers would not be able to take Apple Pay or Google Wallet transactions.

Some of those exclusivity agreements will expire soon, people close to the coalition said, which could explain why Best Buy will accept Apple Pay in stores this year.

Scott Rankin, chief operating officer at MCX, said in a statement that Best Buy remained a partner in the coalition, and that development of CurrentC was continuing.

"We understand - and strongly support - our merchant partners' quest to do what's best for their customers," Rankin said.

"As we have stated in past, we are of the firm belief that there need to be at least 2-3 major players within the mobile payments ecosystem for it to succeed," he said, noting the group's change in position last October.

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