Paydiant doing just fine after last year’s MCX controversy

Be prepared.

The Boy Scout motto served Paydiant well last year when the mobile wallet developer found itself in the middle of a mainstream media brouhaha when fraudsters hacked the email system the Merchant Customer Exchange (MCX) was using for CurrentC app beta testers. 

Paydiant, which helped MCX develop the CurrentC app, had nothing to do with the breach. But that didn’t stop the mainstream media from making life a bit difficult for the Boston-based developer. Fortunately for Paydiant, it had recently finished planning for such occasions and was able to move past the controversy. Now the company appears to have a big 2015 planned.

“We already have all these plans and procedures in place for crisis management because you never know what’s going to happen in payments,” Jed Rice, senior vice president of development for Paydiant, said at the recent National Retail Federation Big Show in New York City. “There’s so much that happens on the breach side that we look at the whole spectrum of things and had different plans for when a customer gets breached, though it wasn’t [our system]. 

“The good news is we had already been working with an outside firm. We had already done this kind of scenario planning in the last six to nine months anyway, so it was actually pretty nice that we were able to jump into it and not only help ourselves, but also help our partner.”

If you’re unfamiliar with last year’s MCX situation, let’s recap. 

The initial controversy centered on the fact that MCX members CVS and Rite Aid turned off NFC support at their respective locations days after Apple Pay went live in October 2014. (CurrentC is a QR code-based mobile wallet.) A few days later, MCX notified beta users that its email partner was hacked. 

MCX CEO Dekkers Davidson did not the name the company in question during what was at times a head-scratching 45-minute virtual press conference, but said the hackers obtained access to some testers’ email addresses and what he described as “dummy ZIP codes.” He said the CurrentC app itself was not hacked, and maintained that the mobile wallet meets and exceeds industry security standards. 

As the MCX NFC situation developed, the mainstream media learned about Paydiant’s role in CurrentC. And that’s when the fun started.

“The mainstream press kind of picks up on this thing and what they point to is there are 5,000 one-star reviews on the app,” Rice said. “But nobody says, wait a minute, this app is not actually active. It was tough, but when you go layers behind that and speak with partners, prospective partners, banks, retailers, they couldn’t care less. None of them paid attention to [the mainstream media reports] at all.”

Rice said the only hiccup Paydiant faced after the CurrentC debacle was when one company’s chief marketing officer had his team call Paydiant about the situation. Paydiant provided the CMO with information and an explanation about what happened and everyone moved on.

Meantime, the company continues to focus on delivering results for its partners in 2015.

In November 2014, Paydiant helped American Express launch the Brooklyn eWallet for Barclays Center in downtown Brooklyn. Users can access the Brooklyn eWallet through the Brooklyn Nets’ team app and add up to 10 credit or debit cards to use as a funding source for purchases. When it’s time to pay for a purchase, fans tap the “make a purchase” option in the app and then scan a QR code generated at the cash register.

Rice said that American Express is launching projects that are retail-focused and retail-friendly and that the Brooklyn eWallet is just the latest example. 

“They [American Express] do a lot of co-branding,” Rice said. “As an extension of that, they are looking at a broad set of retail-friendly tools, and one of them that they are doing is mobile wallets and the Brooklyn e-wallet was kind of the first project we did.”

Paydiant plans to duplicate the Brooklyn eWallet experience at other sporting venues nationwide, Rice said, but he declined to reveal details.

“What’s really interesting about sporting venues, the app is becoming a whole fan engagement platform,” he said.

Retailers can learn a thing or two from sports teams, and that was the focus of the first major panel at the NRF Big Show. A discussion with representatives from major sports leagues was meant to illustrate parallels that exist in the ways sports leagues and retailers engage their end users.

Rice agrees that retailers will head in the same direction, copying what sports venues do now to interact with their fans.

“One of the things you are going to see is how are you going to get the full lifecycle [of a store visit],” he said. “What can you do when you’re headed to the [store], leaving the [store], and everything that happens in between.”

Paydiant to speak at EFTA Board Meeting

Paydiant will be making a presentation at the EFTA’s upcoming Board meeting on February 17, 2015, which takes place at Caesars Palace in Las Vegas. For more information, see the EFTA Events Calendar on the EFTA website.

Photo courtesy of Mike Mozart

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