While you may be wondering how to go about making m-commerce and omni-channel payments work for you, a group of big American retailers – including Shell, 7-Eleven, Target and Wal-mart – have decided to join forces and develop their own mobile commerce platform, taking on a crowded field of banks, telcos and technology companies.
The Merchant Customer Exchange (MCX) is currently building an app it says will offer consumers a “versatile mobile-commerce experience that will combine the convenience of paying at the register with customisable offers”. The partners – including Best Buy, Sears and Sunoco – boast that, between them, they serve nearly every smartphone-enabled American and account for approximately $1 trillion in annual sales.
The consortium is taking on a slew of major players, including the Google Wallet, the soon-to-launch telco-led consortium Isis, not to mention PayPal and Square. When news of the plans first broke in March, Steve Mott from BetterBuyDesign told the Wall Street Journal that the retailers have decided to enter a packed field after surveying the current competition and deciding they can do better.
Mark Williams, president, financial services, Best Buy, argues that: “As merchants, no one understands our customers’ shopping and payment experience better than we do, and we’re confident that together we can develop a technology solution that makes that experience more engaging, convenient and efficient.”
“MCX will leverage mobile technology to give consumers a faster and more convenient shopping experience while eliminating unnecessary costs for all stakeholders,” said Mike Cook, corporate vice president and assistant treasurer, Wal-Mart. “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.”
“We believe MCX is uniquely qualified to offer the most comprehensive mobile payment options for consumers,” said Terry Scully, president of financial and retail services, Target. “By participating in MCX, merchants are in a position to effectively deliver innovative payment approaches that aren’t available today.”
CMX will be up against some stiff competition. Some of the biggest telecom companies in the US – including AT&T, Verizon Wireless, and T-Mobile – are working on their own system, called Isis, which will begin local trials later this year in Salt Lake City and Austin, Texas. And Google Wallet, a big Isis rival, is already accepted at Home Depot, Office Depot, Macy’s, RadioShack, and other retailers. But Google’s use of near-field communication (NFC) technology, which requires a special chip that only a relatively small number of handsets carry, has thus far hobbled consumer adoption of Google Wallet.
And third party providers aren’t going to let this go without a fight. “It was only a matter of time before this type of initiative emerged – driven no doubt by the charges levied on the retailers by the financial industry,” says Terfel Roberts, UK managing director at mobile payments platform, Danal. “However, once again the drive by various sectors in the retail to financial value chain to grab what they perceive to be a valuable piece of business will leave the customer confused, and their options fragmented. It seems that everyone from search engine suppliers, to carriers to retailers all believe they can process payments in a secure and customer friendly way. The truth is the companies that can pull all these different payment methods together, and offer the consumer the flexibility of where they pay from, are none of the above.”
According to Roberts: “Third party payment providers on the other hand are not limited to which carrier, retailer, ewallet, bank or credit card they service. This means they can put the customer in charge of how and when they pay, through their existing sources of finance, without telling the customer they must hold this or that credit card, ewallet or mobile phone contract. The sooner retailers, mobile carriers etc realise this, and open their systems to the third party payment providers more readily, the sooner customers will reap the benefit, and be able to manage their finances more effectively.”