Merchant Customer Exchange (MCX), a partnership between large retailers and
restaurant companies including Wal-Mart Stores, Target and Darden Restaurants will begin its first public tests of its mobile-payment application at several member retailers and restaurants in Columbus, Ohio, in the coming weeks, according to people close to the consortium.
But the public test is happening not long after MCX loses exclusivity with its retail partners. When MCX started, its partners agreed not to adopt alternative mobile-payment systems for a period but that promise expires this week, say people familiar with the contracts – reports the WSJ.
Retailers that are part of MCX are now free to use payment systems from an increasingly crowded field of competitors including Apple Pay, Google Wallet and Android Pay, and Samsung Pay.
Already some of the MCX partners have said they would play the field. On Tuesday, Rite Aid said it would start accepting Apple Pay, as well as Google’s Android Pay, starting August 15. In April, founding MCX partner Best Buy said it plans to accept Apple Pay in stores later this year.
Rite Aid said it would also accept MCX’s app known as CurrentC when it launches. The drugstore chain said it wants to offer its customers a variety of payment options, a Rite Aid spokeswoman said.
Retailers and restaurants partnered to create MCX in 2012 as way to jump ahead of technology companies in the race for a popular mobile-payment system and to avoid credit-card fees that cost retailers billions of dollars each year. But the effort has been stymied by challenges inherent in creating a new payment system without using credit cards, as well as internal conflict between the retailers on strategy, say former employees.
CurrentC is taking a different approach from the other mobile payment options. It links to user’s checking accounts, gift cards or private label debit or credit cards directly, to side-step credit cards and their costly fees. Shoppers scan a code at the register to pay with their phones.
The other options such as Apple Pay and Google Wallet link to user’s credit-card information on a phone. Apple launched its payment system on its newest iPhones last year. The system stores users’ credit-card information on the iPhone and verifies the purchaser using a fingerprint scanner.