A collective of large US retailers, including Walmart, Target, Best Buy and 7-Eleven, have announced plans to create a joint mobile wallet service, joining the already crowded market of telcos, banks technology companies fighting for the m-commerce dollar.
The Merchant Customer Exchange (MCX) is a joint venture formed by more than a dozen retailers many of whom, such as Walmart and Target, are not happy about paying what they see as excessive interchange fees to the existing card schemes run by Visa and MasterCard or to cede the potentially lucrative new m-payment and loyalty programme arena to Isis or other such rival groupings such as MasterCard’s PayPass m-wallet services. The Google Wallet is also, of course, competing in this field alongside many other offerings, including a Starbucks and Square link-up announced this month to push mobile payments. Indeed the US Electronic Transactions Association (ETA) trade body is seeking to create a more unified ecosystem, as announced earlier this week.
The reason why Mobile network Operators (MNOs), retailers, banks and tech firms are all battling to run m-payment and m-commerce services is obvious – namely, whoever controls the wallet, controls the consumer relationship and ultimately the value-add money stream. As previously, retailers also fear excessive fees if they do not gain a say in the developing digital ecosystem. The Gartner research consultancy is predicting that the worth of mobile transactions will rise to $600bn by 2016, from $172bn this year, illustrating the potential in the field but only if consumers are not scared off by multiple, and confusing, rival offerings.
No launch date has yet been given for the retailer-led Merchant Customer Exchange and no chief executive is place to run it or payment technology system to process transactions, but the partners insist that development of the mobile app is underway, perhaps undermining speculation that the announcement may just be a leverage tool for retailers to obtain fair fees.
According to Mike Cook, corporate vice-president at Walmart, the aim is simply to leverage mobile technology to give consumers a faster and more convenient shopping experience while eliminating unnecessary costs for all stakeholders. “The MCX platform will employ secure technology to deliver an efficiency-enhancing mobile solution available to all merchant categories, including retail stores, casual dining, petroleum and e-commerce,” he added.
By Neil Ainger