In many cases (RiteAid pharmacy terminals are the absolute worst about this, but far from the only offender) it's just crappy UX design.
I have an American Express card and a RiteAid rewards card. Here's my checkout flow at the pharmacy:
1. Punch in phone number for rewards card
2. Get prompted to use my "Plenti" points; which require PIN entry
3. Swipe/insert card (most RiteAid terminals used to work with Apple Pay, but had it disabled)
4. Get prompted to use my American Express points. Say no.
5. Enter relevant pharmacy details (DOB, verify pharmacist reviewed prescriptions for you)
6. Remove chip card
7. Sign paper receipt
This UX flow is simply too complicated for a checkout process. It's got way too much friction, and they disable contactless payments to ensure you can't circumvent that.
Making these payments process more quickly is great; but Apple basically already solved that problem with Apple Pay. But it's not effective because it seems that some retailers want more friction in this process.
It really doesn't make any sense to me why retailers want to be doing this. I thought people would really get behind the credit cardless approach.
When I went to China, I was absolutely amazed by how well everything in Shanghai integrated with AliPay. My family was able to go to some restaurants and order + pay with minimal interaction with a waiter.
My guess as someone who doesn't actively work in this stuff (but have dabbled in it) is that some large merchants get a break on transaction fees with chip/swipe that they don't get with Apple Pay/Samsung Pay/etc.
An extra 0.05% in savings wouldn't matter to a small store, but for a national retailer, it's probably a meaningful amount of revenue.
I have an American Express card and a RiteAid rewards card. Here's my checkout flow at the pharmacy:
1. Punch in phone number for rewards card
2. Get prompted to use my "Plenti" points; which require PIN entry
3. Swipe/insert card (most RiteAid terminals used to work with Apple Pay, but had it disabled)
4. Get prompted to use my American Express points. Say no.
5. Enter relevant pharmacy details (DOB, verify pharmacist reviewed prescriptions for you)
6. Remove chip card
7. Sign paper receipt
This UX flow is simply too complicated for a checkout process. It's got way too much friction, and they disable contactless payments to ensure you can't circumvent that.
Making these payments process more quickly is great; but Apple basically already solved that problem with Apple Pay. But it's not effective because it seems that some retailers want more friction in this process.