What is CurrentC, and what does it mean for Apple and Google?

Following Apple’s introduction of its Apple Pay mobile payments system last week, iOS customers had a renewed interest in contactless payments systems within retailers. Existing NFC terminals in thousands of retail locations are already designed to be compatible with payment cards compatible Visa payWave and MasterCard PayPass, allowing customers to tap their cards once for purchases. Apple Pay leverages the iPhone 6’s NFC chip to allow for encrypted payments through the very same terminals, much like Google Wallet’s implementation in Android devices. But some retailers have begun deactivating their payment terminals in stores to prevent the use of Apple Pay and encourage the use of their competitive payment system. It’s called CurrentC, and the collateral damage competition between mobile giants could prove frustrating for customers.

Apple Pay might be among the first contactless payment systems to get the technology industry buzzing, but its technologies aren’t entirely new. Google Wallet predated Apple with in-store NFC transactions, taking advantage of terminals at checkout to enable the use of payment cards within the Google Wallet Android application. The approach is quasi-standard, meaning that Apple’s system interoperates with thousands of retailers beyond those 220,000 announced at the company’s October keynote. But users have discovered that, despite compatible technology, many retailers’ terminals last week seemed to stop working with Apple Pay—or with Google Wallet, for that matter.

Apple Pay launched with a number of retail partners, including Walgreens and McDonald’s. Conspicuously absent from Apple’s partner lineup were massive retail juggernauts like Walmart and Sears. That’s because these businesses have cooperated on a mobile payments solution of their own, available in both platforms’ app stores, called CurrentC. CurrentC uses QR codes on cashiers’ screen to initiate a transaction with the smartphone, circumventing the iPhone’s locked-down NFC chip. CurrentC requires a linked bank account, and asks for users’ Social Security and driver’s license numbers before adding a payment method. The system allows for the application of discounts or promotional pricing all within the app, and was designed to let retailers avoid margin-cutting credit card fees.

Despite CurrentC only being tested in limited markets in Minnesota, retailers have begun deactivating their NFC readers in stores nationwide. This policy change comes years after Google Wallet users began ringing out in affected stores, but blocks all smartphone NFC payment methods in its attempt to curtail Apple Pay adoption. CurrentC is not available yet, and at this time requires an invitation to begin using, but could see an opportunity among smartphone users whose devices don’t include NFC capabilities—namely, older Android phones and iPhones before 6.

Some smartphone users have announced their intention to boycott affected stores, but the real impact of the Apple Pay–CurrentC kerfuffle is longer-term. Retailers are beginning to publicly adopt preferred payment processing methods, and are unafraid of locking out customers whose smartphone purchasing preferences are incompatible. Soon, the decision to shop at one retailer over another might come down to more than location, and might be determined by the smartphone in users’ pockets. For NFC-based solutions like Google Wallet and Apple Pay, the addition of NFC terminals in more retail locations will see all ships rise. But for proprietary systems like CurrentC, the modest process of checking out might soon be roped into the longstanding arguments of platform favoritism.