MCX delays nationwide rollout of CurrentC mobile wallet
At about the same time executives from some key payments companies gathered on a stage in Las Vegas to chat about mobile payments during a panel discussion at the retailer-focused ShopTalk conference, the much-maligned Merchant Customer Exchange announced yet another delay in the nationwide rollout of its CurrentC mobile wallet and laid off some 30 employees as a result.
MCX did manage to recently test CurrentC in a single market in Columbus, Ohio, after multiple delays throughout the past four years. CEO Brian Mooney said in a statement Monday that while it received generally positive feedback about the mobile wallet from consumers and merchants, MCX decided to indefinitely delay a nationwide rollout.
“Utilizing unique feedback from the marketplace and our Columbus pilot, MCX has made a decision to concentrate more heavily in the immediate term on other aspects of our business,” Mooney said in a statement. “As part of this transition, MCX will postpone a nationwide rollout of its CurrentC application.
“As MCX has said many times, the mobile payments space is just beginning to take shape — it is early in a long game. MCX’s owner-members remain committed to our future.”
MCX dropped the news on the same day one of its premier partners in Walmart began the rollout of a similar product called Walmart Pay that relies on QR codes much in the same way as CurrentC.
Mooney mentioned in the statement that MCX will focus on working with financial institutions, like its partnership with JPMorgan Chase, “to enable and scale mobile payment solutions.” This approach is a complete 180 from one of the joint venture’s original purposes for CurrentC.
“I find it really interesting that after spending years criticizing the networks and card-issuing banks for being greedy or not transparent enough, MCX will now be focusing its attentions on bank partnerships,” James Wester, the research director of worldwide payment strategies at IDC Financial Insights, told Mobile Payments Today in an email.
MCX, which counts the likes of Walmart and Target as two of its key members, came together almost four years ago as sort of an act of defiance against the card networks. It wanted to create a mobile-payment system that relied on the ACH network, effectively cutting out the card networks from the process to avoid interchange fees.
But MCX battled problems on multiple fronts in the past four years.
In October 2013, MCX announced at the Money20/20 conference that it was “within a stone’s throw of a pilot,” Jamie Henry, Walmart’s payments guru, said at the time. He told attendees that the participating merchants had an incentive for MCX to succeed since the merchants owned it.
But in a four-week period after Apple Pay debuted in October 2014, things really hit the fan for MCX.
First, MCX members CVS and Rite Aid turned off contactless terminals after the Apple Pay rollout due to an exclusive relationship with a mobile wallet that had yet to debut.
Near the end of that month, MCX disclosed that unauthorized third parties had obtained the email addresses of early pilot participants. That day, former MCX CEO Dekkers Davidson participated in a bizarre 45-minute teleconference to answer questions from reporters via a chat box. In November during an interview with Bloomberg at Money 2020, Davidson made the surprising statement that MCX is technology-agnostic and could work alongside Apple Pay in its partner stores.
Davidson eventually left the company in April 2015 as Mooney stepped into the CEO role. Dekkers’ departure came soon after Best Buy, an original MCX partner, announced it would begin to accept Apple Pay in its U.S. locations later that year.
Soon after Mooney arrived, MCX took small steps in an effort to make CurrentC more attractive.
MCX in August 2015 announced a strategic relationship with Inmar Inc, which provides promotions management and processing, that would enable CurrentC users to find and redeem product-level digital promotions. These digital promotions will be applied automatically at checkout.
In September 2015, MCX expanded its CurrentC beta in Columbus and also announced a partnership with Buy It Mobility Networks to enable consumers to quickly and securely connect their checking accounts to CurrentC.
MCX seemed to be on the verge of a breakthrough when it was revealed as a premium partner for Chase Pay.
“Our partnership links Chase and its customer base with CurrentC’s extensive network of leading retailers, restaurants, grocery stores and fueling stations, which process over a trillion dollars in transactions annually at more than 100,000 U.S. locations,” Mooney said at the time. “This is a significant milestone, not just for MCX and Chase, but for mobile payments overall as the industry continues to take shape. Everywhere CurrentC is accepted, Chase Pay will be accepted.”
At the time of the Chase Pay announcement, MCX was three years removed from its original formation. A lot happened during that time as Apple Pay debuted; Isis/Softcard folded after Google purchased its assets and used some of the technology for Android Pay; and Samsung introduced Samsung Pay into some of its newer devices.
MCX might not be dead, but it’s clinging to life.
“They came in too late [into the market],” Thad Peterson, a senior analyst with Aite Group, told Mobile Payments Today at ShopTalk. “They took too long to get [CurrentC] onto the street. It took the almost four years to launch a pilot and that doesn’t work in this world.
“And the value proposition was never settled on neither the consumer and merchant side.”
Wester, however, still believes MCX can somewhat salvage CurrentC because as he puts it, “somewhere within MCX and CurrentC is the kernel of a good idea: a merchant-focused payment method to rival the networks.”
“Unfortunately, there have always been a lot of questions on the details behind that strategy that never seem to get answered,” he said. “And if payments is anything, it is all about the details. To make payments work reliably at the scale of MCX’s merchant partners requires a significant amount of coordination and cooperation between partners, and MCX was never very forthcoming on explaining how all the necessary partners were working together.”