The Merchant Content Exchange (MCX), which will launch a mobile payments service under the CurrentC brand, plans to introduce the service in one market in mid-2015. Meanwhile, there are also indications that Microsoft (NASDAQ: MSFT) could jump into mobile payments to counter Apple (NASDAQ: AAPL) Pay and Google's (NASDAQ: GOOG) Android-based payments service.
CurrentC's launch location "will be determined based on a number of factors, including retail support, infrastructure and consumer population," MCX said in a statement to IDG News Service.
MCX plans to eventually launch its mobile wallet, loyalty and offers platform at around 110,000 retail locations, including Walmart, Best Buy, 7-Eleven, Sears, Exxon Mobil, Gap and Target. The app will use QR-code technology for transactions, essentially creating a scannable bar code. Some analysts think that merchants are rallying behind CurrentC because of the use of QR-codes as a payment method, which means merchants may not have to incur the credit card fees that retailers have to pay on each credit card transaction.
As IDG notes, MCX launched a small-scale CurrentC trial last year and the platform is currently being tested in several undisclosed markets around the U.S. However, its use is restricted to employees of member retailers, the report said.
MCX took flak last fall after the launch of Apple Pay because merchants that signed up for its system, including CVS ad Rite Aid, agreed to use CurrentC exclusively. CVS and Rite Aid stopped accepting Apple Pay. However, MCX CEO Dekkers Davidson said that exclusive arrangement would expire in "months, not years."
MCX insisted on exclusivity for a short time to give its merchants "breathing room" to develop CurrentC. Davidson said MCX merchants are undertaking a massive overhaul of their systems to launch CurrentC but do not want to see other payment options fail. Additionally, Davidson said that over time MCX could embrace Near Field Communications technology for tap-to-pay transactions. MCX is testing a version based on Bluetooth and said there is "more to come," according to IDG.
Meanwhile, in March Microsoft demonstrated a "tap to pay" feature for Windows 10 smartphones during a conference for Windows hardware makers in China, the WinHEC conference.
According to Business Insider, which cited banking consultant Faisal Khan, Microsoft has applied for licenses for transmitting money in all 50 U.S. states. Microsoft would neither confirm nor deny it is working on a mobile payments service but told Business Insider that "becoming a money service business gives us the flexibility to provide new, innovative cloud services to our customers but we do not have any product announcements at this time."
Whatever happens with Microsoft, it's clear that the mobile payments market is getting more crowded and not less so. Sundar Pichai, Google's senior vice president of products, confirmed last month that the company is working on a new API called Android Pay to ensure that, for banks and credit card companies, payments services as part of Android apps can be handled in a standardized and consistent way that can be scaled globally. An Ars Technica report from February indicated that Google will launch the API at its I/O developer conference at the end of May. Pichai said that Android Pay will do things such as tokenize credit card details for security and ensure that authentication works. He said Google Wallet will be "a customer" of Android Pay but that it could support platforms like Samsung Pay or mobile payments services in China. Pichai added that it will support NFC but that NFC could eventually be replaced by other payment methods, including biometrics.
In February Google acquired Softcard, the mobile payments joint venture backed by Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE:T) and T-Mobile US (NYSE:TMUS). As a result, Google Wallet will now be pre-installed on Android phones (running KitKat or higher) sold by these carriers in the U.S. "later this year," Google said.
As for Apple Pay, Apple CEO Tim Cook said in February that adoption is "going faster than I thought it would--much faster, actually." Cook said he thought many merchants would be reluctant to change their point of sale systems during the holiday shopping season, but that the reception has surprised him. In December, he said two out of every three dollars in the U.S. spent through contactless payments were made via Apple Pay.
Cook noted that big merchants support Apple Pay, including Bloomingdale's, Duane Reade, Macy's, McDonald's, Sephora, Staples, Subway, Walgreens and Whole Foods, as well as mom-and-pop bakeries and toy stores. Apple Watch will also work at the over 220,000 merchant locations across the U.S. that have contactless payment enabled.
- see this IDG News Service article
- see this Business Insider article
Report: Google to launch Android Pay API at I/O to spur mobile payments adoption
Google buys Softcard, will have Google Wallet pre-installed on Verizon, AT&T, T-Mobile Android phones
Report: Google aims to launch revamped Wallet service at I/O, may pay carriers more
Samsung acquires LoopPay, plans to integrate mobile payment technology into future devices
MCX: Exclusivity agreement on CurrentC that bars Apple Pay to expire in 'months, not years'
Apple Pay rival MCX open to using NFC technology in the future