Walmart Pay, retailer's new QR code-based payment app, signals 'a further unraveling of MCX'

Walmart joined the mobile payments crowd with an offering that promises to work with all credit, debit and Walmart gift cards in its U.S. stores. Walmart Pay will run on iOS and Android and will launch in some stores this month before being rolled out nationwide during the first half of 2016.

The move may signal doom for Merchant Customer Exchange (MCX), a Walmart-backed consortium of major retail chains backing their own mobile payments system, dubbed CurrentC. That system has suffered a series of delays and recently launched in beta in Columbus, Ohio, more than three years after MCX was announced.

As analyst Patrick Moorhead observed via Twitter, the introduction of Walmart Pay "indicates a further unraveling of MCX."

In response to questions about Walmart Pay, a representative for MCX offered this statement to FierceWireless: "Walmart continues to be a strong and supportive partner of MCX and CurrentC -- and our goals remain the same -- to offer consumers choices and convenience at checkout. CurrentC is currently in beta in Columbus, and we are excited to continue to work towards a national launch of the CurrentC app with Walmart as one of our 40 merchant partners. In the meantime, MCX remains focused on refining and improving CurrentC to bring it to consumers everywhere."

Like CurrentC, Walmart Pay is based on QR codes rather than the tap-and-pay NFC technology at the heart of Apple Pay and some other mobile payments offerings. Customers launch the app and activate the camera at the register, then scan the code displayed at the register. A receipt is delivered to the user via the app.

walmart pay
Walmart Pay

Walmart, the world's largest retailer, claims more than 4,600 U.S. stores, and roughly 22 million shoppers use its app each month. And it has withheld support for Apple (NASDAQ: AAPL) Pay and other NFC-based schemes while developing its own system.

But the company is joining the mobile payments market as the segment appears to be on the rise in the U.S. A survey of U.S. consumers released this week found that 18 percent of respondents reported paying via their phones in a store at least once this year, up from a mere 5 percent last year.

Starbucks has effectively tapped smartphone owners primarily by rewarding regular customers with free drinks and other incentives to use its mobile payments app, but it remains the lone major success story in the U.S. Meanwhile, Samsung Pay this week said it has added gift support from 50 major merchants in the U.S.

But Walmart still faces an uphill battle in an unproven market. The vast majority of consumers have yet to be convinced that mobile payments are somehow better than using credit cards or cash, and payments using QR codes simply aren't as convenient as those traditional methods. Unless the chain can develop some creative ways to entice its users to pay via mobile, Walmart Pay will founder just as so many other offerings have. 

Indeed, a trio of the nation's biggest wireless carriers essentially withdrew from the mobile payments space earlier this year when they sold Softcard (rebranded from Isis) to Google, which incorporated the mobile payments service into its Android Pay offering.

For more:
- read this Walmart press release

Related articles:
MCX's CurrentC mobile payments system may not launch until 2016 as Samsung Pay muscles in
Samsung Pay beta launches in U.S. as Apple expands mobile payments reach
Ovum: Google Pay 'not a game changer' for mobile payments