The announcement by MCX (Merchant Customer Exchange) regarding the suspension of its CurrentC® mobile payments platform was met with little fanfare last week, as most in the payments space have been expecting this announcement even sooner than it came. The handwriting has been on the wall for several years. A few factors have played a part:
- The use of QR code versus NFC technology
- The acquisition of its white label technology platform (Paydiant) by PayPal
- The privacy issues (hacking) that plagued its early release
- ApplePay® and the new Walmart mobile payments app developed by one of its founding members
Any one of these could derail the well-intended efforts of merchants to maintain their own customer data, but the combination was lethal.
The fact that MCX announced its partnership with Chase Pay was also indicative of its acceptance that payment applications developed by financial institutions appear to be on the rise and can provide an even better customer experience at a lower cost. Chase Pay, which is scheduled to debut in mid-2016, is both an in-store and in-app scheme that will give consumers the ability to pay for goods and services at MCX partners. These include big players such as Best Buy, Chili’s, Kohl’s and Walmart, among others. Merchants stand to benefit the most from Chase Pay, as Chase offers retailers a fixed pricing structure to accept Chase Pay and will not charge for card network fees, merchant processing or merchant fraud liability.
MCX will most likely continue its work with coupons and other purchase incentives, but as a service to be integrated into merchants’ own mobile wallets and potentially other company’s mobile wallets. This might lead to MCX’s efforts being integrated into web offering and other vehicles, but time will tell. What is certain, however, is that merchants—many who continue as active members of MCX—will continue to provide their customers with unique services and solutions. These will be designed to leverage the mobile device and create a differentiated customer experience that drives loyalty to their brand.
While still less than 1% of overall payments, mobile payments are considered to have gone viral. As customers get tired of waiting for longer EMV payments and realize the fact that mobile payments are more secure, there is expected to be a sizeable increase in usage, particularly among younger consumers. There are still many different mobile technologies being deployed, including NFC, QR Codes, MST, and others. It will be interesting to see which ones resonate with customers. Much of that depends on ease of use, incentives provided to use them and/or the devices and merchants that are attached to them. CurrentC® may look to be down for the count at this time, but the fight will continue for many years to come and a clear winner has yet to emerge.