March 9, 2015
The mobile payments space is witnessing massive growth. We have Apple Pay gaining popularity, Samsung’s recently launched Samsung Pay, and Google’s planned release of a new mobile payments platform called Android Pay. With so many options in the market, it ultimately depends on what consumers wish to use. Moreover, it would be foolish on the part of retailers if they do not heed their customers’ preferences.
It is not wrong to say that current events might change the mindset of MCX, the consortium of retailers. It’s well known that MCX has wanted its member retailers to exclusively support CurrentC, a QR-code based mobile payment system developed by Paydiant. MCX has been open to accepting other forms of payments besides CurrentC, but things may eventually take a turn. Paydiant was recently acquired by the payments giant PayPal. This might impact Paydiant’s relationship with MCX in some manner.
CurrentC has been in a pilot phase for quite a while, and there is only speculation so far that it will launch this year, with no confirmed dates. Meanwhile, Apple Pay has gained massive traction post launch and has a high rate of success among its retail merchants. Apple Pay accounts for $2 of every $3 transacted using contactless payment methods. It seems that MCX members now feel that they are missing out on the innovation underway in the mobile payments space.
In a recent report by The Wall Street Journal, Charles Holley, CFO of Walmart, hinted that the retail giant might be open to accepting other forms of mobile payment systems outside of the MCX member options. Charles hinted that they would ideally go for a combination of multiple mobile payment methods like Apple Pay, Google Wallet, CurrentC, etc. so that users on multiple mobile platforms can make payments at Walmart stores.
Last year, Meijer, another MCX member, had indicated that it was determined to support Apple Pay and wouldn't shut down its NFC terminals. However, Rite-Aid and CVS, also members of MCX, had shut down the NFC capabilities in their POS terminals. The current situation shows that this might not have been a well advised choice. CurrentC hasn’t been launched yet and it may have already missed its chance to impact the competition. Competitors like Apple Pay are increasing their transaction numbers day by day. MCX’s major backer in mobile payments (i.e. Paydiant) is itself now part of PayPal, who might not want Paydiant to run a competing mobile payment system (i.e. CurrentC).
Given the market realities, MCX might soon face the heat from its own members. Walmart already has a big influence in the retail market and its approach could affect that of other retailers also. One day MCX might open itself to all forms of mobile payment systems. The fate of CurrentC remains to be seen.