Merchant Customer Exchange (MCX) will start a limited commercial test of its CurrentC-branded mobile payments service in some U.S. retail stores starting next month, according to a report from Bloomberg that cited unnamed sources familiar with the effort. According to Lowe's, a supporting MCX retailer, the CurrentC mobile payments service will launch commercially in the third quarter of this year.
The reporting from Bloomberg indicates the mobile payments space is poised to get even more crowded, with heavyweights like Samsung, Apple (NASDAQ: AAPL), PayPal, Google (NASDAQ: GOOG) and others already jostling for a better position in the nascent but potentially explosive market for mobile payments.
MCX is "making good progress," Scott Rankin, MCX's COO, told Bloomberg. "We expect there to be more than one successful player in mobile payments, and we expect to be one of them."
However, Bloomberg noted that MCX now faces a range of competition. Initially announced almost three years ago, MCX is a joint venture among major U.S. retailers including Wal-Mart, Target, Best Buy and others. Since its founding though, the mobile payments space has been overtaken by Apple Pay, the iPhone vendor's mobile payments service that uses NFC and fingerprint-scanning technology, as well as newer offerings from Google and Samsung. (Indeed, Apple CEO Tim Cook this week said that the company expects fully 1.5 million locations in the United States will be accepting Apple Pay payments by the end of this year.) Moreover, the mobile payments space has already seen its share of upheaval: The mobile payments service founded by Verizon Wireless (NYSE: VZ), T-Mobile US (NYSE:TMUS) and AT&T (NYSE: T) conducted a rebrand from Isis to Softcard last year, then earlier this year sold itself to Google.
And MCX faces internal challenges as well. According to Bloomberg, the service doesn't work with credit card companies, meaning users will have to either rely on cards issued by retailers or will have to connect their banking accounts directly to MCX. (The upside for MCX supporters is that they won't have to pay credit card fees.) Further, Bloomberg noted that MCX CEO Dekkers Davidson was replaced in April by interim CEO Brian Mooney, a Bank of America executive. Finally, and perhaps most importantly, Bloomberg reported that MCX members signed a three-year CurrentC exclusivity agreement--one that ends next month. Meaning, MCX members will be free to support other mobile payment services like Apple Pay. Already, Best Buy supports Apple Pay.
MCX has said it plans to eventually launch its mobile wallet, loyalty and offers platform at around 110,000 retail locations, including Wal-Mart, 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.
- see this Bloomberg report
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