Before most consumers have gotten around to downloading a single mobile payments app onto their smartphone, a consortium of a big chain stores are preparing to push out yet another alternative. The Wall Street Journal reports that Walmart, Target, 7-Eleven, Best Buy, CVS, Sunoco, and more are in the early stages of developing a horribly-named payments network called Merchant Customer Exchange (MCX), which will let users pay with a tap of their phone.
Rather than go the Starbucks route and partner with Square or follow other national retailers (like Duane Reade, RadioShack, Banana Republic, etc.) into Google Wallet, the group is going rogue, arguing that Google and other telecom providers–AT&T and T-Mobile have a payments app called Isis; Verizon and Vodafone have one as well–don’t understand customers like they do. The retailers behind MCX point out that they have a combined $1 trillion in annual sales and “serve nearly every smartphone user in the U.S.”
Terry Scully, Target’s president of financial and retail services told the New York Times:
“What we are looking for is a broad, seamless experience across all retail formats,” Scully said.
Of course, the idea of downloading a different mobile payments app depending on the store hardly feels seamless. At this rate, consumers will have to keep track of which imperceptible coalition each retailer belongs to, as though they’re a bunch of politically-aligned nation-states. Not to mention the discomfort of uploading your credit card info it each. As the Journal notes:
The proliferation of mobile-payments systems might confuse consumers, skeptics say. But participants say the rival efforts reflect a predicament: Each industry needs the other to make mobile payments succeed, but each group wants to lead the way.
Even among people with a cellphone and a bank account, only 11 percent used mobile payments last year, according to a survey from Gartner. However, a recent report from Juniper Research says mobile payments is expected to almost quadruple to $1.3 trillion annually by 2017. Between now and then, a little federating might do the industry good.