8 Big Stories Transforming The Payments Landscape

The payments market is emerging as the laboratory where some of the most innovative and disruptive developments in financial services are occurring. What can banks do to capitalize on this transformation?
September 05, 2013


5. Striving For Ubiquity In Mobile Payments

The Merchant Customer Exchange aims to enable customers to make mobile payments at numerous retailer locations nationwide, but gaining widespread acceptance on the back end with banks and payments networks is just as important for the initiative's success.

The mobile wallet space only grows more competitive as Merchant Customer Exchange (MCX), a joint mobile wallet venture involving a number of the nation's top retail chains, including Best Buy, Wal-Mart and Target, is taking its first steps toward joining the mobile wallet race.

Many mobile wallet ventures have struggled because of the number of participants that must be brought in to make a system viable: merchants, payments processors, device manufacturers, card issuers and network carriers, among others. MCX has the retailer end covered, which the new company hopes will be a big draw for consumers. The retailers partnered in the venture combined have nearly 100,000 locations in the U.S. "What we will deliver on … is the opportunity for the consumer to get coffee, gas, groceries, prescriptions, clothes and hardware at retailers they already visit every day, and at every location along the way they can use the MCX solution," says Dodd Roberts, a member of MCX's executive team. "That ubiquity will enhance the consumers' lives."

But that ubiquity can't be achieved unless the back-office transaction processing side of the system can gain widespread acceptance among different financial institutions and payments processors. "There's been a lot of focus [in mobile payments] on providing offers for consumers. It's simple to do that," Roberts explains. "The back-end piece -- moving transactions quickly and securely -- that's the difficult part."

To that end, the initiative recently announced a partnership with FIS, which will build a payments switch for MCX that can move transactions through any financial institution. "We want to be just as ubiquitous on the back end, too," Roberts notes.

MCX also is partnering with Gemalto to design its mobile application and front-end user experience, and recently hired Dekkers Davidson, a former Barclaycard executive who helped launch the first cloud-based mobile wallet in the U.S., as CEO. These moves, along with the participation of more than 20 of the country's top 100 merchants, have MCX poised to pursue the kind of pervasiveness that Roberts talks about. — J.C.

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