Apple Pay: MCX Consortium Underestimating Apple Users’ Loyalty?

Every channel partner knows of the legendary passion and devotion of Apple (AAPL) users for their iPhones, iPads and Macs. Some of the nation’s largest retailers may soon be learning about it as well.

With Apple Pay newly available only for a week, giants CVS and Rite Aid, both members of the powerful MCX consortium of merchants, abruptly ditched the mobile payment platform over the weekend without saying why. Home Depot and Walmart also have done the same. Their moves drew a lot of attention, but the impact is uncertain and difficult to predict. 

The “why” may lie in the details. In 2012, MCX retailers reportedly paid as much as $500,000 to join up, signing a three-year contract to exclusively adopt the consortium’s retailer-controlled mobile payment app called CurrentC. For those who came onboard, their initial deals still are valid into next year when the CurrentC platform is slated to go live.

Other powerful MCX members, including 7-Eleven, Bed Bath & Beyond, Best Buy (BBY), Kmart, Kohl’s, Lowe’s, Sears, Southwest Airlines and the major gas companies, have yet to weigh in on whether they, too, will shun Apple Pay, but the expectation is they will. Keep in mind, by the way, they’ve already thumbed their noses at Google (GOOG) Wallet.

CurrentC works like a debit card on a shopper’s checking account but its operation requires users to go through a series of steps and provide confidential information—never a welcome proposition these days. Still, because no credit card companies are involved in the transaction it eliminates the 2 percent to 3 percent fees Visa, MasterCard and American Express routinely charge, effectively adding to the retailer’s bottom line.

Millions of Apple loyalists shopping at MCX merchants may balk at not being able to use Apple Pay and elect to shop elsewhere. Or they could simply take out their charge card as they’ve done in the past, consummate their transaction and be on their way.

Is it better for business when retailers restrict some consumers’ choices in mobile payment options but risk losing customers to gain a few bottom-line percentage points? Right now, no one knows for sure.

The way the battle lines are shaping up, Apple’s got the banks and major credit card companies in its corner and it controls the hardware and software that underpins Apple Pay. But a large number of the country’s most powerful merchants are huddled with the other side. The ace up Apple’s sleeve, of course—and it’s a doozie—is the 20+ million iPhone 6 units already sold with millions more still to come. That’s a lot of customers for MCX-aligned retailers to tell that they’ve dismissed Apple Pay.

Can the new kid on the mobile payment block win? In the long run, Apple might very well prevail, especially considering the roster of old-line retailers comprising MCX is likely to underestimate the zeal and loyalty of Apple iPhone users. There may not be a similar class of product and platform zealots to match Apple’s anywhere. If they hold the fort, there’s a good chance the MCX merchants will cave.