August 15, 2012, 4:45 PM

Merchants unveil their mobile payments program

The mobile wallet initiative started by Wal-Mart and other merchants has a name and more retailers.

Katie Evans

Managing Editor, International Research

Lead Photo

It launched earlier this year without a name. Now the mobile wallet initiative started by Wal-Mart and other merchants has opened up a bit, announcing its name—Merchant Customer Exchange—and more members.

Details about the program’s exact plans are still sparse, however. The company is “dedicated to offering consumers a versatile mobile-commerce experience that will combine the convenience of paying at the register with customizable offers,” the group said in a release today.

However, earlier this year those involved with the program told Internet Retailer that the group is developing its own mobile payment system, which typically centers on a mobile wallet. A mobile wallet loaded on a smartphone enables consumers to store payment card data to make purchases at bricks-and-mortar stores. In today’s release, the group said it is working on a mobile app that will focus on providing consumers offers, promotions and retail programs through any smartphone, though it did not call that app a mobile wallet.

Merchants involved in the program, coined MCX, include: 7-Eleven Inc., Alon Brands, Best Buy Co. Inc., CVS/pharmacy, Darden Restaurants, HMSHost, Hy-Vee Inc., Lowe’s, Publix Super Markets Inc., Sears Holdings Corp., Shell Oil Products US, Sunoco Inc., Target Corp. and Wal-Mart Stores Inc.

Combined, these initial members serve nearly every smartphone-enabled American and account for approximately $1 trillion in annual sales, the group says. The group says it also plans to reach out to smaller merchants and financial institutions as well.

“MCX will leverage mobile technology to give consumers a faster and more convenient shopping experience while eliminating unnecessary costs for all stakeholders,” says Mike Cook, corporate vice president and assistant treasurer at 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.”

The real driver for adoption of such a program is the consumer—not the retailer, not the wireless carrier and not the payments company, says David Stone, co-founder and CEO of digital gift and incentives technology provider CashStar. “For any mobile payment system to be a success there have to be benefits for the consumer, such as convenience and speed,” Stone says. “Even more important are tangible benefits like rewards incentives and a personalized shopping experience.”

Stone adds that while he thinks consumers are open to programs that offer an alternative to carrying around a lot of cards, provide benefits and let shoppers use their smartphones, there needs to be a way to unite all the users and all the features of such a program.

“The infrastructure needs to be there to enable mobile payments, and the Starbucks and Square announcement speaks volumes about this topic,” he says.

Stone is referring to Starbucks’ announcement last week that it will invest $25 million in mobile payments company Square as part of its Series D financing round. Square will process the credit and debit card transactions at Starbucks’ 7,000 U.S. shops, which will significantly expand Square’s operations while reducing Starbucks' payment processing costs, Starbucks says.

As for MCX, the group doesn’t intend to compete with other mobile payment schemes, Steve Mott, principal at the BetterBuyDesign consulting firm, which is working with MCX merchants, said earlier this year. The project is open to any company that works toward the group’s objectives of producing a more efficient, safer and better user experience, Mott said. He added that the system is envisioned to work across mobile commerce, e-commerce and inside bricks-and-mortar stores.

“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,” says Mark Williams, president of financial services, Best Buy.

MCX plans to announce additional members in the coming months.

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