CHICAGO, Oct. 29, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Rite Aid Corp. (NYSE:RAD-Free Report), CVS Health Corporation (NYSE:CVS-Free Report), Apple Inc (Nasdaq:AAPL-Free Report), Wal-Mart Stores Inc. (NYSE:WMT-Free Report) and Best Buy Co. Inc. (NYSE:BBY-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
Rite Aid, CVS Remove Apple Pay from Stores
Major drugstore retail chains, Rite Aid Corp. (NYSE:RAD-Free Report) and CVS Health Corporation (NYSE:CVS-Free Report), have reportedly blocked the use of Apple Inc's (Nasdaq:AAPL-Free Report) recently launched mobile payment application, Apple Pay, in all its stores across the country. However, throughout the week, Apple Pay app was functional in all Rite Aid and CVS Health stores.
While Rite Aid's management made clear that the company is still evaluating its mobile payment options, CVS Health's management was not available to comment.
This action, taken a week after Apple Pay's launch, has added fuel to the fight between retailers and mobile payment system providers over the use of the mobile wallet technology. Earlier, before the app was launched, retailers like Wal-Mart Stores Inc. (NYSE:WMT-Free Report) and Best Buy Co. Inc. (NYSE:BBY-Free Report) had declared that they do not intend to utilize the system.
The drugstore chains belong to group of retailers who oppose the use of mobile payment systems like Apple Pay, Paypal, Google Wallet and many others, as they are unwilling to pay the fees involved and also want to obtain the customer data collected during such transactions.
In order to satisfy these two conditions, this group is in the process of developing a payment system of their own called CurrentC, with the help of Merchant Customer Exchange ('MCX'). The application, which currently functions as a coupon-and-rewards smartphone app, is being improvised to eliminate the use of credit cards while making payments at stores in the future. Although the feature to make payments from the app is in the test phase, it is slated to debut across all stores early in 2015.
The consortium of retailers who have come together to develop the new payment system is led by Wal-Mart, followed by many others. It is no surprise that all members of this consortium have rejected the use of Apple Pay.
Apple Pay works on the new iPhone 6 and iPhone 6 Plus models using the tap-to-pay feature that is capable of accessing the cash register at any store equipped with the Near Field Communication ('NFC') technology. The catch here for Apple is that merchants willing to adopt Apple Pay have to upgrade their payment-acceptance systems in order to read those short-wave signals.
Though both CVS Health and Rite Aid stores are compliant with this NFC technology they chose to turn off the access of these radio waves in order to support their own payment system, CurrentC, which is yet to be launched.
Looking into the future, the mobile pay market is expected to jump to $90 billion in 2017 from $12.8 billion in 2012, as suggested by a report of Forrester Research. While mobile wallet apps like Paypal, Google Wallet and others have not seen much success so far, market sources expect the Apple Pay app to attract a large group of customers.
In this context, analysts believe that the retailers opposing the use of this app will sooner or later be forced to adopt the same in order to satisfy customers who opt to pay through it.
Given this view point, the decision of the drugstore giants and others to block the use of Apple Pay remains a debatable issue. However, we believe the consumers are caught in the tussle between retailers and these mobile wallet providers and left without a choice to select their preferred payment mode.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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