Apple Pay rival MCX open to using NFC technology in the future

The Merchant Customer Exchange (MCX) is willing to use Near Field Communications technology like its rivals, its CEO said. MCX is a consortium of some of the country's largest retailers that is setting up a mobile payments program that will stand as a rival to Apple (NASDAQ: AAPL) Pay, Softcard and other mobile payment offerings.

"We're agnostic about technology," MCX CEO Dekkers Davidson said during a press conference, according to TechCrunch. "We started with QR code-based technology that allows us to go to market broadly. If we need, we can pivot to NFC."

MCX, which is launching a payment platform called CurrentC next year, held the press conference to address the uproar caused by drug store chains (and MCX members) CVS and Rite Aid, which stopped supporting Apple Pay as well as other payment methods that use NFC technology. Neither company had officially joined Apple Pay, but customers were able to use the service before it was disabled at the two chains last weekend.

Apple CEO Tim Cook called the developments a "skirmish." He said this week that more than 1 million credit cards were activated on the Apple's new Apple Pay service within 72 hours of its launch last week.

"I think there's been a mistake made here, and that is focusing on the technology instead of what business or consumer problem you're trying to solve," Davidson told the New York Times.

He also noted that many in the industry had largely written off NFC for mobile payments until Apple finally decided to support it. "It's ironic in a way that we're talking about a really old technology being employed here," he said. "Way before Apple Pay, merchants hadn't enabled it or planned on using it."

MCX plans to launch its mobile wallet, loyalty and offers platform under the CurrentC brand in 2015 at around 110,000 retail locations, including Walmart, Best Buy and Target. The app will use QR-code technology for transactions, essentially creating a scannable bar code. As Re/code notes, merchants are rallying behind CurrentC because it's a payment method that won't incur the credit card fees that retailers have to pay on each credit card transaction.

"CurrentC is built for retailers, to help them cut out interchange fees," Nick Aceto, senior director at payment technology firm CardConnect, told Reuters. "It's not a solution that will appeal to customers because it does not make their lives any easier."

According to MCX, the app will make purchasing more seamless by applying qualifying offers and coupons, participating merchant rewards, loyalty programs and membership accounts, and then offering payment options through the consumer's selected financial account, all with a single scan. Further, users' payment information will be secured in the cloud rather than on the device, and the app will use a token placeholder to make transactions instead of constantly passing the data between the user, merchant and financial institution.

The New York Times had reported that CurrentC retailers would need to pay fines if they decide to use other mobile payment methods like Apple Pay. However, Davidson said "it's simply not true, there are no fines." MCX would not say though what happens if a partner breaches their contract. MCX merchants that choose to use MCX technology do so exclusively--meaning they can't offer Apple Pay, Softcard or other services alongside CurrentC.

Meijer, a grocer that's listed as a member on MCX's site, said it won't ban Apple Pay. When asked about whether that would disqualify Meijer from using CurrentC, MCX COO Scott Rankin did not definitively say so. "I think if they want to go forward and continue to accept Apple Pay, down the road at some point if they want to be a customer of MCX and roll out CurrentC and offer it to customers that's great," he told Re/code.

Yet Davidson said it was possible that in the future MCX could be used side by side with other payment systems. "In the future, that could be entirely possible…there will need to be two to three strong players in the ecosystem. One won't simply build the market."

Davidson also acknowledged that MCX's email provider was hacked, though he wouldn't disclose the name of the provider. He said the hack exposed fake zip codes and "some tester email addresses." He added: "The CurrentC app itself was not affected. We own this and are taking it seriously."

For more:
- see this Re/code article
- see this TechCrunch article
- see this NYT article
- see this Reuters article
- see this 9to5Mac article

Related Articles:
Apple's Cook open to partnering with e-commerce behemoth Alibaba
Reports: CVS, Rite Aid drop support for Apple Pay, other NFC-based mobile payments
After Apple Pay, the NFC Forum's director digs into app developer community
Analysts: Apple Pay will help spur wider usage of mobile payments
MCX to launch CurrentC mobile wallet in 2015 at major retailers

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