Merchant Customer Exchange

Merchant Customer Exchange (MCX) is a company created by a consortium of U.S. retail companies to develop a merchant-owned mobile payment system, which will be called "CurrentC." The joint venture was announced on August 15, 2012.[1]

The company is led by merchants such as 7-Eleven, Alon Brands, Best Buy, CVS Health, Darden Restaurants, HMSHost, Hy-Vee, Lowe's, Michaels, Publix, Sears Holdings, Shell Oil Products US, Sunoco, Target Corporation and Walmart. The initial retailers that are part of the new company account for about $1 trillion in annual sales.[2]

CurrentC

MCX's flagship product is CurrentC, a mobile payments platform. The system utilizes a smartphone app and digital wallet: to make a purchase, the user scans a QR code shown on the cashier's screen, or has the cashier scan a QR code from the phone's screen. Instead of transmitting financial data over the internet, the transaction uses a token placeholder that is then converted by the financial institution to initiate the Automated Clearing House (ACH), gift card, private label charge card or other type of payment and charge the consumer.[3] The CurrentC app also includes features that will help the user locate a retailer, display coupons, display loyalty program details, and track receipts using data collected from transactions and the user's device.[3]

The system is built upon technology developed by MCX, with involvement from multiple technology providers, including Paydiant. Paydiant is a startup based in Boston, now acquired by PayPal.[4] The system, intentionally, does not support all credit cards, as one of its goals is to prevent merchants from having to pay their interchange fees. CurrentC transactions can directly debit customers' banking accounts via the ACH system.[5][6]

On launch, CurrentC supports the use of QR codes, Bluetooth Low Energy beacons and geolocation, unlike its competitors which mainly use near-field communications. The solution is capable of utilizing multiple technologies, MCX will continue to consider the addition of other technologies for use in the app in the future.[7][8]

CurrentC entered public beta for users in Columbus, Ohio in September 2015, and will be available to the general public in Early 2016. Initial reports suggested a launch in Late 2015 but those plans were pushed back due to delays.[9]

Reception

The soft launch of CurrentC was met with controversy. Critics felt that MCX members were engaging in collusion by attempting to prevent the use of competing, near-field communications-based contactless payment services, such as Apple Pay and Google Wallet—both of which are backed by companies involved in the wireless industry—at their establishments. MCX members Best Buy and Walmart explicitly stated that they would not support Apple Pay at their stores, while in late-October 2014, CVS Health and Rite-Aid silently disabled the ability to use NFC payments entirely.[10][11]

Although The New York Times reported that this was a contractual requirement which could result in fines if retailers do not comply, MCX CEO Dekkers Davidson denied this claim, stating that it was up to individual retailers to decide which payment systems they want to support, but made a statement implying a technological limitation preventing the use of the system alongside other contactless payment systems at the present time.[12] Davidson later admitted that it had requested that MCX members implement exclusivity for CurrentC for a period lasting several months in order to give the platform "breathing room", and denied any direct order to CVS requiring that it stop accepting other NFC-based payment methods.[13] On October 30, 2014, regional supermarket chain and MCX member Meijer denied any plans to disable competing contactless payment services.[14]

The security of the system was also a cause for concern: on October 29, 2014, the company revealed that some email addresses of participants and individuals participating in the pilot program had been accessed. No information about the number of individuals affected by this hack has been disclosed.[15] CurrentC can also collect customer data for use by merchants: its privacy policy states that the service's software may collect location data for the purposes of completing transactions, protected health information during medical-oriented transactions, and information about the device and operating system the app is installed on. The service may, on an opt-out basis, also collect information for use in connection with marketing and loyalty programs.[16][3]

In response to the concerns surrounding its security issues and the anti-competitive actions performed by MCX members, a semi-organized campaign emerged on App Store and Google Play Store to give the CurrentC software negative and low-scoring reviews in protest.[17]

On April 28, 2015, Best Buy announced that it would begin to support Apple Pay at its locations, explaining that "today's consumers have many different ways to spend their money and we want to give our customers as many options as possible in how they pay for goods and services at Best Buy."[18] On August 11, 2015, Rite Aid followed suit by announcing that contactless readers would return to all of its 4,600 U.S. stores, giving Apple Pay and Google Wallet users the ability to use those services as a method of payment once again.

References

  1. ↑ "Leading Retailers Form Merchant Customer Exchange to Deliver Mobile Wallet". Yahoo News. Retrieved August 15, 2012.
  2. ↑ Sidel, Robin (August 15, 2012). "Payments Network Takes on Google". The Wall Street Journal. pp. C1, C2. Retrieved August 15, 2012.
  3. 1 2 3 Constine, Josh. "CurrentC Is The Big Retailers’ Clunky Attempt To Kill Apple Pay And Credit Card Fees". TechCrunch. AOL Inc. Retrieved October 26, 2014.
  4. ↑ "This Boston Startup Hopes It Can Win Like Starbucks Vs. Apple Pay". Bostinno. Retrieved 29 January 2015.
  5. ↑ Sanders, James. "Apple Pay competitor CurrentC hacked before service launch". TechRepublic. CBS Interactive. Retrieved November 6, 2014.
  6. ↑ Rash, Wayne. "CurrentC Must Coexist With Apple Play to Survive in Retail World". eWeek. QuinStreet. Retrieved November 6, 2014.
  7. ↑ "Retail group MCX says it's not telling merchants to block Apple Pay". CNET. CBS Interactive. Retrieved 29 January 2015.
  8. ↑ "Apple Pay vs CurrentC? Michigan credit card processors say consumer demand will drive the debate". MILive.com. Advance Publications. Retrieved 29 January 2015.
  9. ↑ Apple Pay Competitor CurrentC May Not Launch Until Next Year
  10. ↑ "Apple Pay goes offline at CVS, Rite Aid". Ars Technica. Retrieved 30 October 2014.
  11. ↑ Popper, Nathaniel (September 11, 2014). "Banks Did It Apple's Way in Payments by Mobile". The New York Times. Archived from the original on September 15, 2014.
  12. ↑ "CurrentC tries and fails to explain why merchants are blocking Apple Pay". The Verge. Retrieved 30 October 2014.
  13. ↑ "What Are the Anti-Apple Pay Merchants Afraid Of?". Re/code. 4 November 2014. Retrieved 5 November 2014.
  14. ↑ "Grocery chain Meijer breaks with other CurrentC retailers to accept Apple Pay". The Verge. 30 October 2014. Retrieved 30 October 2014.
  15. ↑ "Retailers’ Apple Pay Competitor Has Already Been Hacked". Time. Retrieved October 29, 2014.
  16. ↑ "Retailers Banning Apple Pay Are Taking a Big Security Risk". Recode. Retrieved 30 October 2014.
  17. ↑ "iPhone and Android fans are raiding reviews of the CurrentC payments app". The Verge. Retrieved October 29, 2014.
  18. ↑ "Best Buy will accept Apple Pay despite allegiance to CurrentC and MCX". Ars Technica. Retrieved 29 April 2015.

External links

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