Last week we saw a flurry of announcements around CurrentC, a merchant-driven alternative payment scheme that is designed to cut the costs from electronic payment processing. Sure, they didn’t demonstrate a great approach to security with the notification of their breach last week, but no payment information was put at risk.
CurrentC is designed to work in a similar manner as Apple Pay (enabled by a smartphone), but it platform independent and works using QR-codes to transact business. Essentially, any merchant with a scanner that can read a QR-code would theoretically be able to accept this form of payment. That brings in grocery stores and big-box retail for sure as most use some kind of scanning technology to assist in speedy customer checkout. There is an integration piece that needs to happen to allow for this form of payment, but the beauty of it is that each transaction causes a dynamically generated code to be presented for payment. Stealing a picture of the code won’t do you any good.
The cost savings comes from enrolling bank accounts into the system and transferring money via an Automated Clearing House (ACH). Funds transfers via ACH enjoy much lower fees than payments through card networks. This is not the first offering to use such a mechanism to get around interchange fees, but it is the first that I am aware of that is trying to have wide-scale adoption through a smartphone.
According to CurrentC’s website, they have the ability to tie into points and loyalty programs, though there is little detail here. While they claim to have my favorite loyalty programs available, I have a hard time seeing how I would be able to earn AAdvantage Miles or Marriott Points using this program. Like most cardholders, I have a few loyalty programs that I like to work with to earn certain kinds of benefits. I suspect that CurrentC’s points programs will be more universal like American Express, where you can trade points in one program for points in another. I sent an email over to their team asking for clarification last week, but it has so far gone unanswered.
I’ve requested an invitation to try it out and will report back if it is granted. Right now, none of the alternative schemes are as easy or universally accepted as whipping out my existing plastic from my wallet, so all of these schemes have a ways to go before there will be wide-scale acceptance.