Digital Transactions Authoritative, insightful and timely information for payments professionals
By John Stewart
After a three-year gestation period, the Merchant Customer Exchange’s CurrentC mobile-payment service is planning to launch a pilot in Columbus, Ohio, during the last week of August, a source with knowledge of the matter tells Digital Transactions News.
The pilot will involve locations belonging to a handful of merchants to begin with, among them The Wendy’s Co. hamburger chain, which is headquartered in Dublin, Ohio, near Columbus. It’s not clear how many consumers will be involved, but it will apparently include a broader group than have participated in limited tests at several locations up to this point, the source says.
MCX would not comment on the matter. Wendy’s did not respond to a request for comment.
For now, MCX appears to be ruling out general-purpose cards. Consumers are able to load just four payment methods into the CurrentC wallet, including a bank account for automated clearing house transfers as well as the REDcard credit, debit, and gift card from Target Corp., according to a “help” page posted on the CurrentC Web site.
Target and Wendy’s are among more than 60 retailers backing MCX. Others include Dunkin’ Donuts, Exxon Mobil, Giant Eagle, Kohl’s, Southwest Airlines, and Wal-Mart and its Sam’s Club unit. Besides Wendy’s, it remains unclear which MCX merchants will be involved in the Columbus pilot. Target, which has 17 stores in the Columbus area, did not immediately respond to an inquiry from Digital Transactions News.
The wallet will work with Android phones running Android 4.0 and above and iPhones running iOS 7 and above, according to the CurrentC help page, which says, “We are always adding new devices to the list.”
Once consumers have downloaded the CurrentC app, they will pay in stores by opening the app, entering a 4-digit PIN, pressing a “pay” button, scanning or showing a barcode that encodes transaction details, selecting a payment method, and pressing a “pay now” button, according to the Web site.
A streamlined “Quick CurrentC” routine sets up a default payment method and lets users skip several of these steps. The barcode triggering mechanism was designed by Paydiant Inc., a Boston-based startup acquired earlier this year by PayPal.
An MCX user agreement dated July 29 and also posted on the CurrentC site refers to the help page as well as several other documents, including terms and conditions and a privacy policy.
If it comes off as planned, the broader consumer pilot will represent a major move by the merchants that control MCX but will follow the emergence of competing wallets from American Express Co., Apple Inc., MasterCard Inc., PayPal Holdings Inc., and Visa Inc. In addition, Google Inc. and handset maker Samsung Electronics Co. are expected to launch mobile-payments services this fall.
That kind of competition is likely to present a challenge for the MCX consortium, which formed in 2012 at least in part to combat fees imposed on merchants by the general-purpose card networks. “They’re going to have a very difficult time,” observes Thad Peterson, who follows mobile payments for Aite Group LLC, a Boston-based research firm. “Had they launched prior to Apple [Pay] it would have been a very different picture.”
Apple Pay launched in the U.S. in October and has proved to be increasingly popular with users of the iPhone 6 and 6 Plus, as well as the new Apple Watch.
Whether CurrentC can compete with Apple Pay, let alone half a dozen other major efforts, is “the million-dollar question,” says the source with knowledge of the pilot.
Consumer adoption of CurrentC could be hard to predict, Peterson says. On the one hand, the limited range of payment options may discourage some users who are looking to use a general-purpose credit or debit card, and still others may be put off by the need to provide bank-account information. On the other hand, Target’s REDcard is a popular option and offers an automatic 5% reward, which may appeal to a broad range of consumers.
Merchant adoption will depend on a number of factors, as well, Peterson says. The interchange savings are likely to appeal most to large retailers, which pay the bulk of interchange costs, he says, while the attraction to smaller merchants will be limited. Small sellers may also be more focused on pleasing customers who want to use wallets from Apple or Google, Peterson says. “There’s a lot of triggers that would militate against participating in MCX,” he notes.
Others would argue that such questions are the reason broader pilots are conducted. With that in mind, the people and merchants of Columbus may well determine the future shape of MCX’s ambitious payments venture.
