Apple Pay at Walgreens is something less than magical

Updated on Nov. 20 with edited checkout steps

Walgreens was among the first and certainly the most enthusiastic partners in Apple’s mobile payments initiative. But if Steve Jobs himself went into his neighborhood Walgreens to buy hand sanitizer and paid with Apple Pay, I doubt he would walk away thinking “that was a magical experience.”

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The checkout process at Walgreens — with all the taps and scans and key punches — can be a long and clunky one, and right now Apple Pay doesn’t do much to help.

I just got a new iPhone 6, and I think it’s a swell piece of gear. So naturally Apple Pay is one of the first things I wanted to try out.

Here are the steps I went through yesterday when I paid for a prescription, some toothpaste, and a Gatorade:

1. Give Walgreens club card to cashier to scan.
2. Place finger on Touch ID and tap phone to terminal.
3. Enter PIN on terminal.*
4. Do you want to donate to <Some diabetes charity>? No.
5. Would you like cash back? No.*
6. <$XX> will be debited from your account. Is that correct? Yes.
7. Cashier hands you paper receipt.
8. Cashier puts paper coupons in your bag.

Update: In the original version of this story I included in the checkout steps that I woke up the phone, unlocked the phone and selected Passbook before I could use Apple Pay. Actually, none of these steps were necessary, Apple informs me. Once you move the iPhone close to the card reader and rest your finger on the TouchID button, the phone will automatically load Apple Pay from the lock screen and make the payment via your default card.

*If you’re using a credit card these steps don’t apply. However if, like me, you have a debit card in Apple Pay the system automatically steers you to do a debit card payment, then asks you for your PIN. This establishes a direct connection between the Walgreens system and your bank. Since the payment isn’t running over the credit card network, Walgreens then doesn’t have to pay the 2 – 3 percent interchange fee. On the same screen on the Walgreens terminal where it asks you for your PIN number, there’s a little blue button you can use to steer the system back to a credit card payment — but it’s hidden in plain sight.

There’s a lot of clicks and wasted motion in the process. Granted, many of the steps are just Walgreens stuff, like when it asks you to donate, or if you want cash back. But taken as a whole user experience, Apple Pay really doesn’t help much to simplify things.

Apple Pay does exactly what credit cards and debit cards do — nothing more, nothing less. It’s just on your phone now.

At Walgreens it seems like Apple Pay is really a small part of the process — you’re on your phone for a few seconds and then you spend the rest of the time interacting with the Walgreens point-of-sale terminal (while the cashier stands there watching to make sure you don’t fall asleep or drool on the card reader).

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Some parts of the process, it seems, could be baked into the Apple Pay system.

For instance, when I touch my phone to the terminal it should just know that I am a Walgreens Balance Rewards Club member. I shouldn’t have to carry a card around and have the cashier scan it every time, which the vast majority of Walgreens customers do. The savings I get on each sale should be calculated by Walgreens’ system, as usual.

You can photograph the bar code from your Balance Rewards card into the Walgreens app on your phone. But it too acts just like a physical card — the cashier must pick up the handheld scanner and scan a barcode from the Walgreens apps showing on your phone.

Walgreens used to offer to send me my receipts by email. I never did it because I didn’t want to give them my email address. But Walgreens has now dispensed with email receipts. One cashier told me the e-receipt system didn’t work very well, and that not many people were requesting e-receipts.

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Why can’t my receipt be delivered to me through the Apple Pay system? Can’t Apple, the merchants, card-issuing banks, and credit card networks work together to put my receipts in a secure and easily accessible place online? Seems pretty basic.

And finally, Walgreens generates a lot of paper every day just handing out coupons. But I’d wager that 80 percent of these coupons never get used. People put them in a drawer and forget about them. I do. Those should be processed through my phone, too.

You can use the Walgreens app to put your Balance Rewards card in Passbook, but the integration with Apple Pay is still limited. You can “clip” coupons from the Walgreens app to Passbook, but again the cashier scans your phone and the product for the coupon amount to be applied.

Ideally, of course, the Walgreens app should integrate with Passbook in such a way that the whole process happens behind the scenes. I should tap my phone at the terminal once, then the system should see that I’m paying for something for which I have a valid coupon, and apply the discount to my total.

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Apple Pay’s major rival in the mobile payments world is CurrentC, developed by the Merchant Consortium Exchange (MCX) which includes large retailers like Walmart, 7-Eleven, and Gap. While CurrentC currently requires the use of QR code scanning at checkout, its major differentiator is that it reportedly processes rewards and coupons in a streamlined way. It also collects more consumer data than Apple Pay (which collects virtually none), which the merchants can use to target consumers with more relevant marketing content.

I haven’t used CurrentC, so I can’t say how well it works, but Walgreens is a perfect example of why all the above functions should be rolled into the mobile payments platform. The point is to remove friction points and makes things easier for users.

Right now, we’re told rewards cards and coupons are outside the scope of what Apple Pay does. That’s fine, but in the end shoppers will ultimately evaluate mobile payments technologies by how much they improve the whole checkout process, not just the credit/debit part.