Retailers Unite to Compete in Mobile Payments Wars

Recently, we announced that Groupon, the online social couponing site, was launching its own mobile payment platform to compete with existing options such as Google Wallet, Square, and PayPal.  Mobile payment options are becoming ubiquitous at retail chains; shoppers are seeing more and more of the familiar logos on credit card terminals at stores nationwide.  However, Groupon is not alone in attempting to circumvent the rise of the mobile payment power players.  Now, a consortium of large national retailers has banded together to create an alternative mobile payment scheme to compete with the existing giants.

The team of retailers has banded and branded together under the name “Merchant Customer Exchange,” and its roster includes a list of heavy-hitters in the retail world.  Not only are discount giants Wal-Mart and Target on the list, but it also includes drugstore chain CVS and gas and convenience brand 7-Eleven.  The initial rollout of the mobile payment solution from Merchant Customer Exchange (MCX) will be designed to help participating retailers to integrate loyalty programs, offers, and promotions with the new mobile commerce solution.

 Though this news is long on promise, it is relatively short on details.  Information has not yet been released regarding participating card companies or technology partners.  Most likely, MCX’s mobile payment solution will be designed to compete with Google Wallet, Isis, and Square by offering an online, mobile wallet powered by NFC.  It is unknown what effect the recent issue of Apple’s newest iPhone, surprisingly (and somewhat disappointingly for the mobile payment community) lacking in NFC compatibility, will have on the proposed mobile commerce solution from MCX.

 Perhaps, the adoption of mobile payments by this large segment of the retail population will escalate the adoption of NFC and mobile commerce solutions across multiple sectors.  It is certainly the hope of the participating merchants that there will be safety in numbers.  Perhaps this consortium of mega-retailers will give them leverage against the rising competition from existing mobile payment programs.

 According to MCX itself, it plans to strive to live up to its name by focusing on the consumer and offering increased security and ease-of-use.  The MCX plan also sets out a customizable design that allows individual merchants to tailor the system to their individual needs.  The mobile application is still in development, but it is being designed to operate on nearly any smartphone.

 The participating merchants are excited about the prospects.  Mike Cook, corporate vice president and assistant treasurer of Wal-Mart says, “MCX will leverage mobile technology to give consumers a faster and more convenient shopping experience while eliminating unnecessary costs for all stakeholders.”

 The proposal is full of great promise for the mobile payments community.  What remains to be seen is how the final product will affect the customer and merchant experience.  MCX has high hopes for its product and its ability to compete with mobile payment giants.  No matter the result, this announcement makes it clear that mobile payments are here to stay.

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