It has been an eventful week for American Express Co. Today the company announced that Woonsocket, R.I.-based drugstore chain CVS Corp. has agreed to serve as the first national merchant to accept ExpressPay, an AmEx system that relies on radio waves rather than card swipes to authorize transactions. This news comes on the same day that pharmacy giant Walgreen's Co. announced it will stop accepting AmEx cards effective Jan. 14, and on the heels of the news earlier in the week that Citigroup Inc. has agreed to become the second U.S. financial institution to issue American Express products (Digital Transactions News, Dec. 14). CVS, which operates 5,300 pharmacies in 36 states and the District of Columbia, has already equipped 485 stores in seven states to accept ExpressPay, which AmEx has been testing in Phoenix, New York, and Singapore. The chain plans to roll out the technology to all of its stores by the middle of next year, according to AmEx, which also says it will roll out ExpressPay nationally to its cardholders next year, as well. ExpressPay works with either keyfobs or cards, and uses an RFID signal to send card data to receivers linked to payment terminals. Because it replaces card swipes and signatures, it slashes tender times, a key consideration for high-throughput locations that want to replace cash but can't afford to slow down transactions. AmEx's pilots have indicated that transaction time is faster than cash, while average tickets are 20% to 30% higher, the company says. On the downside for American Express, Walgreen's, the nation's largest drugstore chain and ninth-largest retailer, says it will no longer accept the travel-and-entertainment company's cards after eight years of chainwide acceptance. The Deerfield, Ill.-based chain also accepts Visa, MasterCard, and Discover. It says higher discount fees it pays for AmEx transactions relative to the other card brands have not been justified by higher ticket sizes. Walgreen's says its rate for AmEx payments has not changed in the time it has taken the company's cards, and AmEx accounts for a small percentage of its total card transactions. AmEx issued a statement after Walgreen's' decision saying it is “disappointed” and regretting that the chain did not leave payment decisions in the hands of its customers. Walgreen's operates 4,681 stores in 44 states and Puerto Rico. Its decision to stop taking AmEx applies to these stores as well as to walgreens.com, Walgreen's Mail Service, Walgreen's Home Care, and Walgreen's Specialty Pharmacy.
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