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Apple Pay rival MCX defends security after hackers steal emails

Gregg Keizer | Oct. 31, 2014
'If you poke at a large ecosystem, you should expect attacks,' says MCX CEO in hastily-called news conference.

At times defiant, Davison claimed that CurrentC, which will allow merchants to collect and store large amounts of information on -- and the shopping habits of -- their customers, was completely secure.

"We have expected attacks, there have been many attacks," said Davison. "We have been attacked repeatedly in the last seven or eight days." Also during the call, he reiterated what MCX has said before, that data would be stored "on secure servers in the cloud."

The organization, which has promoted CurrentC as safe and secure even as major merchants' systems are increasingly breached in massive thefts, rose to the top of the news earlier this week when iPhone 6 and iPhone 6 Plus owners discovered that two members -- the Rite Aid and CVS pharmacy chains -- had disabled their point-of-sales terminals' NFC (near-field communications) capabilities. That blocked Apple Pay from being used in their stores. For several days last week, those same iPhone users were able to use Apple Pay at the chains' terminals.

CurrentC and Apple Pay not only use different approaches -- CurrentC relies on QR codes displayed on a smartphone's screen, while Apple Pay uses the Touch ID fingerprint scanner to authenticate the customer and NFC to transmit "tokens" between an iPhone and the terminal -- but also different transactional networks.

While Apple Pay ties payments to American Express, MasterCard and Visa credit cards issued by a host of banks, MCX draws money directly from a customer's checking account through the Automated Clearing House (ACH) network. MCX was designed, say analysts, to sidestep credit cards and their transaction fees, part of a battle between large retailers -- Walmart especially -- and Visa and MasterCard that goes back nearly two decades.

"CurrentC is far more secure than alternatives that have been advanced in the last several years," Davison claimed today. "The hack reminds us that there are people motivated to steal information. [But] this will make us stronger."

 

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