Analysis: Retail's answer to Apple Pay probably doomed

LOS ANGELES — It's as if the Three Stooges had been given the assignment of introducing a new and safer way for consumers to pay at some of the biggest retail stores.

CurrentC is the new smartphone payment system from a consortium of retailers, including Best Buy, WalMart, Target and Sears, all hurting from poor sales.

The system is currently being test-marketed at some "confidential" locations. And this week, the company behind it had to admit some really damaging news: the system has already been hacked.

Before it's even launched.

The odds that you'll ever see CurrentC rolled out nationally are slim to none.

You can't make this stuff up.

CurrentC, run by the Boston-based Merchant Customer Exchange (known as MCX), has the misfortune of following in the footsteps of Apple's hugely successful mobile payment launch, which nabbed 1 million new customers in three days and has drawn rave reviews.

Apple Pay is the most consumer friendly mobile payment system we've seen yet. It solves the security hurdle (just who are you giving your credit card to?) and speed (fumbling for your wallet and credit card.) But it's not perfect.

It's great if you happen to have a new iPhone. It only works with the current iPhone 6 and 6 Plus models. So if you're one of the 500 million folks with an older iPhone, you're out of luck. If you happen to own an Android phone, you can't use the Apple Pay system either.

And of course, if you like to shop at Wal-Mart, Target, Best Buy, CVS, no Apple Pay there either. Yet.

So an alternative system that works with all Apple and Android smartphones should be great, right?

Not exactly.

Let's take a look.

• The new iPhones have built-in NFC (near field communication) chips that talk directly to pinpads near the cash register. Put your credit card information into the Passbook app on the iPhone for Apple Pay. Wave the phone at the pinpad, and secure the transaction with your fingerprint from Apple's TouchID.

• CurrentC doesn't work with credit cards. You heard me. This mobile payment system connects your checking account, and MCX says the advantage is it can add in coupons and loyalty information from the retailers.

But those free airline miles that millions of consumers have come to love from their credit cards, which encourage them to make big purchases? Nah, not at our store.

(Since the original publication of this piece, MCX chief operating officer Scott Rankin called USA TODAY and said only 25% of the sales at his merchant partners come from traditional credit cards issued by Visa, MasterCard and American Express.)

Instead of fingerprint technology, CurrentC uses the clunky QR code system, an idea whose time has yet to come. To register, you currently have to give MCX your social security number, driver's license and banking information.

And, the system has already been hacked.

Would you trust these folks with your info?

Yes, Apple had security issues with nude celebrity photos and network attacks on its cloud, but we haven't heard of any issues with iTunes and credit card accounts.

MCX was started because retailers are sick of paying the 2% to 3% processing fees to credit card companies. There's nothing wrong with that sentiment.

Merchants upped the ante in this little mobile payment war when MCX members CVS and Rite-Aid disabled their NFC pinpads when they discovered that iPhone users were using it at the check-out.

The pinpads were installed to be used with Google Wallet, a system that debuted two years ago and never took off much beyond the installation of the NFC terminals.

The action from the drug store giants had the reverse effect: it mobilized the online world (nearly 5,000 scathing 1 star reviews of the CurrentC app on the Google Play and iTunes app stores) and shined a light on just how backwards and un-consumer friendly the merchant plan is.

Prediction: one by one, in weeks, if not days, many of these partners will backtrack, and end up signing with Apple, and/or revisiting Google Wallet.

You won't see a national launch of CurrentC.

The retailers, who are fighting the tide of lower sales, have too much to lose to continue the association.

Follow Jefferson Graham on Twitter