Apple Pay and MCX : It's Not (All) About Interchange Fees

Credit cards get stolen, in one form or another, every day, as do debit cards. For me, one of the fundamental differences between the two, as I’ve unfortunately experienced personally, is this: bogus credit card charges can be disputed, and in the end, you won’t have to pay them if the issue is resolved. Fraudulent debit card charges can also be resolved – but until they are, your bank account is probably empty. It’s one reason we use credit cards far more than debit cards.

Apple Pay makes that even more secure, dramatically reducing the possibility of fraud. And it’s stupidly easy to use. And the way it’s implemented, with near-field connections and secure tokens, a merchant never sees your name, never sees your credit card, has no idea who you are or what your spending habits are: it’s like using cash at Radio Shack and declining to fill out any personal information.

Think about that.

There’s a lot of buzz generated about the feud developing between Apple Pay and the Merchant Customer Exchange (CTX), a consortium strongly supported by Walmart. Most of the press seems to think this is all about avoiding those fees that MasterCard, Visa and American Express charge for processing purchases through their networks. MCX, with their product, CurrentC, plans to avoid those charges by having customers tie their CurrentC purchases directly to their checking accounts. CurrentC also avoids the necessity of having an iPhone 6 in your pocket by flogging that old mostly-dead horse, QR codes. MCX-loyal merchants like CVS and Rite-Aid have gone so far as disabling their touch-to-pay POS terminals (also disabling Google Wallet), preferring to wait for their own MCX solution, to be launched sometime next year. That’s right, these merchants are now preventing you from using certain payment methods in their stores with the idea that this will somehow incline you to be loyal to their own “real soon now” homegrown methods.

While there are a lot of details left to be made public, as someone who’s been in the security business for a long time, the Apple Pay model looks to me like a lot of problems solved elegantly using newer, better tech, while the MCX model looks like someone trying to warm over processes invented almost 20 years go. And personally, I’m not inclined to use a system that requires me to tie my checking account directly into their system; I effectively quit using PayPal years ago for that very reason.

I agree that this is about the money – but not, in fact, about the interchange fees. MCX wants to build a payment network that centers more on a “loyalty program” model, one that allows merchants to “provide valuable messaging” to their customers, based on their intimate understanding of a “customers purchasing history and habits”. In other words, they want to track their customers’ every move.

Merchants are used to paying the interchange fees, and long ago built those fees into their pricing structures. I’m sure they’d love to find a way to strip that 2% to 4% off and save that money (although I’m highly skeptical we, the customers, would see those savings should they do that). But in the end, what terrifies the merchants is the specter of their customers becoming truly opaque to them: They are terrified of losing their ability to use us as a marketing channel.

Island Bound 5: Relocated!

[continued from Island Bound 4: I Love it When a Plan Comes Together]

It’s now the end of May. I arrived here in Kula two months ago, to address some repairs and additions to the house, get an electrician in, get a plumber in. My car arrived a day early, and our shipping pod arrived a week early – so that both arrived on the same day, which was a circus. Getting my car registered was an all-day exercise, but I learned a lot that helped Sarah get the same done for her car in half the time (although DMV at first refused to believe that a VW Golf could be a diesel). Our dog Beast didn’t make the trip, as we had to put him down a few weeks before his quarantine period was up. We miss him.

The major and minor construction projects are pretty much finished, and it’s time to get down to living the island dream. I plan to keep posting as I learn things about this beautiful place. I must say that both Sarah and I feel blessed in that pretty much everyone we’ve interacted with here on the island has positively exuded aloha.

Now it’s time for us to find some ocean to jump into…

Comcast: a spectacular failure

A year and a half ago, we added Xfinity Home Security to our Comcast subscription. Comcast sent in a guy who installed all the wireless (read: peel and stick) components throughout our house in Issaquah, Washington, installed the control unit and extra router (which killed Back to My Mac until I reconfigured their network components), and of course added a monthly charge to our bill. The system mostly worked, with some odd behaviors from the control unit, an essentially bad systems architecture, and the “security router” that was basically a joke.

A few months ago, we sold our house and moved. Because we were terminating service before our 3-year Xfinity Home Security contract was completed, we found ourselves facing an early termination fee of nearly $500. But since the new owner wanted the same security system, we were told we could transfer our contract to them and avoid the early termination fee. But to do that, I had to reach out to the new owner, and we both had to meet, in person, at the Comcast service center, to present IDs, sign a bunch of forms and officially transfer service. A total pain in the ass, reminiscent of something out of the 1990s.

We canceled our Comcast service on 27 March, 2014,

Two months later, living on Maui, I was surprised to see that we appeared to be continuing to make monthly payments to Comcast. WTF? That’s where the surreal fun began. I called Comcast and chatted with Jose (Note: I am honestly not making this up.) :

“You have to talk to the account owner to stop this.”

“I was the account owner. I don’t live in that house any more.”

“I’m sorry, but the current account owner for that address is the only one who can change this.”

“What? You can’t just stop this there?”

“I’m sorry, but only the account owner can change their automatic payment arrangements.”

I was the account owner. I sold the house. Why are you still using my checking account to pay for someone else’s cable service?”

“I’m sorry, but perhaps you can have the account owner add you to the account so that you can log in and change that.”

I demanded to speak with a supervisor, and was connected with Anthony, who informed me that, because we’d transferred the Xfinity Home Security account to a new owner, Comcast apparently transferred all service to the new homeowner, kept my autopay configuration in place, and effectively ignored my service termination request. Anthony also told me there was nothing I could do about it short of begging the current homeowner to stop using my checking account to pay for their service.

I demanded to speak with a manager and Anthony’s response was:

“I can request that you be connected with a manager, and someone should contact you in three to five business days.”

Thats when I went from perplexed to angry, told Anthony he’d better damn well connect me with someone who could fix this now or I’d talk to my bank about rejecting the payments. Anthony put me on hold for 15 minutes and came back, telling me he’d spoken with a manager:

“We have stopped the autopay from your account, but we will not refund money for services rendered.”

“But those services were rendered to someone else. And it was your team that screwed this up when the account changed hands.”

“I’m sorry, but we will not refund money for services rendered.”

I then contacted my bank. The representative there informed me that, once you sign up for automatic withdrawal with a company, there is no way you can prevent a company from continuing to extract funds from your account short of closing that account. He said I could report the withdrawals as fraudulent, which is in a sense completely factual, and the bank would take the matter up with Comcast, and possibly the authorities.

Reporting the withdrawals as fraud would put the new owner in an uncomfortable position with Comcast, so I reached out to him, let him know his cable service was no longer being paid for by me, and asked him to send me a check for the payments I’d made for him. He was agreeable to that, and as far as I know, the situation has been resolved.  

We’ll see in another month if Comcast has really truly dissolved our relationship. Their team screwed this up in a spectacular way, and their customer support proved either powerless or apathetic when trying to resolve the situation.

Update

Two months after the above, we heard from the folks who purchased our Issaquah home. They’d just discovered that I was still the registered owner of the security system. They found this out when they pushed “TEST” on the smoke detector, which promptly set off the alarm and called the fire department, who arrived to address the issue. The homeowners were unable to cancel the test because, well, it wasn’t technically their system. The only recourse Comcast offered was for them to contact me and ask me to cancel our system. The one we’d transferred nearly three months before.

Beast

If you’ve been reading my blog, you’ve been following our preparations for relocation to Maui. Part of that adventure included getting Beast, our Alaskan Malamute, to the island as well. Sadly, those plans have now changed.

Beast had been having some throat issues for a while, and we thought we had it pretty much taken care of. Last week, the coughing became suddenly worse, and he started refusing food. Sarah took him in to the vet, and the X-ray revealed a huge tumor in his throat, distorting his trachea, and putting him at risk of asphyxiation, a horrible way to go. Sarah was with him in Newport with family while I was in Kula setting up the house. I turned off the saw, realized I had a text from Sarah, and called her. Her first words were “he’s gone, baby, I’m so sorry.” Sarah had been trying to reach me, and I either couldn’t hear the phone or wasn’t getting reception, so she had to make the hard call by herself, a hellish task. We can only be thankful that the choice was clear.

Change is hard for dogs, and the last month or so had been especially challenging for our boy, with strange people viewing the house, packing, things disappearing into boxes. We set his travel crate up in the living room with us and he really took to it, preferring to stay in there quite a bit, denning. Then out of the house and into a hotel for a week. Sarah was working, so Beast and I were on our own, together constantly, going for walks, exploring the pet store, finding the hotel room, learning about elevators. He was game, curious, playful and, a bit unusual for him, snuggly.

On the 30th, I gave him a hug and a belly rub, and departed for the airport for Maui. I didn’t know it was the last time I’d see the dog I’d adopted seven years before.

Since my departure, Sarah had him roaming the beaches in Oregon, playing with his new dog friend Odie on the ranch in Newport, and seemingly rediscovering some of the puppyhood he’d never had. His last weeks were filled with adventure, and he embraced it.

When I first brought Beast home with Belle, he was the troubled one, lacking any sort of confidence, glued to Belle’s side. Touching him anywhere back of his shoulder blades caused him to cower and cry in fear. Three years later, I could grab his tail and he’d understand it was play – but that was a long, gentle process to get him to realize he had a place in our home that was his. We watched him blossom, learning it was all right to play, to ask for attention, to demand dinner. When we lost Belle, he became our only child, the sole center of our dog-world. He moved out of her shadow and started expressing himself more than ever before. He watched more television than any dog I’ve ever known.

Beast was a gentle giant, curious but insecure, loving but only just beginning, really, to understand how to ask for love, fascinated by little children. I like to think he’s running with Belle now, free and happy. Our pack is smaller, and we miss him terribly.

Island Bound 4: I Love it When a Plan Comes Together

[continued from Island Bound 3: Plan A]

off Maalaea
off Maalaea

Plan A suggested that the only thing we needed to do immediately was get the Kula house rented. That assumption is pretty much where Plan A began to fall apart. We needed some repairs done before we could rent the place out, and getting construction work done on Maui isn’t exactly predictable. Even on the mainland, contractors have multiple jobs, distractions, budgeting issues and crew changes. That can be more pronounced in a place where people, both employers and contractors, embrace the concept of Island Time. It can be frustrating – but you have to remember you’re entitled to embrace that concept too!

The guy I’d asked to do the repairs wasn’t going to be available until about April. This being January, we were talking about two or three months of double mortgage payments without rental relief. Also in January, we flew out to visit our house, live in it for a week, and get the feel of things. During that week, we fell more in love with the house, the neighborhood, the island. I also met my contractor face-to-face, and we really hit it off. All of these things contributed to the beginning of the Downfall of Plan A.

We also felt like we should get our Issaquah house on the market – we’d heard too many stories about how many months it took, realistically, to sell a home. So we engaged an agent and started the process. We didn’t hear it at the time, but another piece of Plan A crumbled and crashed into the sea.

The Collapse of Plan A

Fast forward a few weeks. We’ve been preparing for an open house to launch our home on the market. Cleaning, repairs, staging the place. The weekend arrives, and we have to take the dog and make ourselves scarce for both days as strangers tromp through our house. Also during that week, lots of calls from agents who want to show the house – many of whom either (a) can’t figure out how to disarm the alarm and set it off or (b) can’t seem to remember to arm the alarm when they’re done. An uncomfortable time, strangers in the house and the unknown ahead.

The week after the open house, I had to travel east for work. That week, a number of things piled up: first, some aspects of my mother’s estate resolved themselves, and the entire thing was closed. Then on Wednesday, I talked with our realtor, who informed me that we had four offers. After six days on the market. The best offer, from a lot of perspectives, had two downsides: we had to decide by 9pm PT that evening (declining not really an option as the offer was well above our asking price), and if we accepted the offer, we had to be out of the place by March 27th. It’s February 19th. A few other planets aligned during the week, Sarah and I had a few very long talks, took some deep breaths. Then we accepted the offer. We now had about six weeks to stitch all the details together to pack and leave our home of the last seven years to live… somewhere: Enter the beginning of Plan B.

Plan A is dead, long live Plan B

More decisions. One direction was renting a house in Issaquah for a year or so while we rented the Kula house. The more we thought about it, this option just wasn’t that attractive. And after spending a week in the Kula house, getting to know people and places, we were now highly motivated to become island people. On Friday the 21st, while I was still traveling, we both gave notice at our jobs, and Plan B, the process of immediate relocation, began in earnest.

Now for the logistics. Plan B means an incredible set of interlocking to-do lists, calls, emails, forms filled out, etc. Thank you OmniFocus. Moving so soon means that Beast can’t go right away – he’s not eligible to arrive on Maui until May 9th because of his Rabies quarantine, while I have some things on Maui I need to start pursuing (things like jobs) as soon as possible. So Plan B resolves into two separate migrations: the first at the end of March, shipping my car, all of our stuff getting shipped in a “ReloCube” (our entire life into a 6’x7’x8′ container), our house cleaned and vacated. Then I rejoin our stuff and my car on Maui, set up housekeeping, get all the utilities and construction resolved, and look for work. Sarah takes Beast and spends some time with her family since we won’t be able to drive there from now on. The second migration happens when I fly back to Seattle, rejoin Sarah and Beast, see Beast off at Air Cargo, ship Sarah’s car, hop on our own flight, and then we all end up in our new home together. Easy!

First cut of Things to Think About looks like this (without any of the really detailed stuff):

  • plan my migration
    • book my flights there and back
    • shipped stuff I want to have there on arrival (tools, etc.)
    • assemble docs and materials that should not be sent, shipped or checked in baggage
      • passports
      • SS cards
      • originals of car registrations
      • bank documents
      • cash
      • camera gear
      • laptops, servers, RAIDs
  • plan our joint trip in May
    • book one-way flights for both of us
  • downsize
    • living space: going from a 2 floor, 5 bedroom, 2800 sq. ft. house to 1 floor, 2 bedroom, 690 sq. ft.
    • garage: no more 2-car garage, only carport – downsize there too!
    • climate: no more long wool coats (they rot), down vests (they rot), leather bags (you get the picture)
  • get rid of extra stuff
    • sell all unneeded stuff on Craig’s List
    • schedule a garage sale to get rid of what’s left
    • donate stuff that didn’t sell
  • ship our stuff
    • identify a shipper
    • schedule container drop off at Issaquah house
    • schedule container pickup at Issaquah house
    • get an estimated date for arrival of container at Kula house
  • schedule my car for shipment
    • identify a shipper for our cars
    • research the rules for shipping a car to Maui
    • book an interim rental car on Maui for until my car arrives
    • research the rules of registration transfer from the mainland to Maui
      • figure out how to deal with the car having to be registered within 30 days, but Sarah not arriving until day 35, and we’re both on the registration
    • start the process of changing insurance
    • start the process of title transfer
    • get written permission from our lender to ship our cars
  • schedule Sarah’s car for shipment
    • [all the same stuff as for my car except no interim rental]
    • figure out what to do when her current registration expires during shipment (of course)
  • figure out how to get Beast to Maui
    • identify a pet relocation service
    • get the paperwork done:
      • AQS-278 form, filled out, signed and notarized, original delivered to Hawai’i Dept. of Agriculture
      • Neighbor Island Permit received from Hawai’i Dept. of Agriculture
      • Health Certificate issued less than 5 days before Beast’s departure
      • additional stuff to go with Beast and his carrier taped to top of carrier
    • book a pet-friendly hotel for the time between when we vacate the house and when I fly out
    • schedule the vet for Health Certificate exam
    • book a hotel between Beast’s departure and ours, pet-friendly should he not make his flight
    • book a rental van because we’ll need it to get Beast and his carrier to Air Cargo, and Sarah’s car will already have been shipped
    • schedule the vet to meet Beast at Kahului on arrival
    • book a kennel in Kahului for Beast until we get there the day after he arrives
  • after all the dust has settled
    • Hawai’i drivers’ licenses (Kama’aina rates are really helpful!)
    • change mobile phone numbers to 808
    • open accounts at a local bank
    • jobs!

And the list grows daily.  Plan B is happening!

[next: Island Bound 5: Relocated!]