It’s Mooney in, Davidson out As MCX Picks a New CEO Ahead of Expected Launch

Brian V. Mooney, who on Tuesday took over as interim chief executive of the retailer-controlled Merchant Customer Exchange LLC payments consortium, brings strengths to the organization that could prove valuable when MCX at last launches its long-awaited CurrentC mobile-payments system, sources tell Digital Transactions News. And, by some accounts, he will need to tap those strengths in his new role.

In a press release announcing that Mooney is replacing Dekkers Davidson, who had been in place only 21 months, MCX cited Mooney’s background as chief executive of Bank of America Merchant Services and before that president of First Data Merchant Services, both major merchant-acquiring operations. “Brian is a proven leader who has spent a substantial portion of his career at the forefront of payment technology, processing and acquisition. He is the right leader for MCX now,” the company said in a statement.

Sources tell Digital Transactions News that Mooney was also attractive to MCX because he brings strengths in managing automated clearing house payments. MCX reportedly will rely on the low-cost ACH network as its transaction backbone to keep payments costs under control.

The ACH is a key component, for example, in managing so-called decoupled-debit transactions, which allow organizations to issue cards that can draw on demand-deposit accounts at any bank. This is a model MCX is said to be pursuing. “Mooney’s a good guy, he knows the ACH business inside and out, and that’s a real positive,” says Steve Mott, principal at industry consultancy BetterBuyDesign, Stamford, Conn., and a former consultant to MCX.

It remains unclear, however, how long Mooney will remain in office, since he has been designated an interim chief executive. An MCX spokesperson would not comment beyond the company’s official release except to say that “a determination about whether he will become the permanent CEO will be made in the future.” Nor would she comment on reasons for the departure of Davidson, who came to Needham, Mass.-based MCX in the summer of 2013 from Barclaycard U.S.

Mooney steps into his new role at a time when 3-year-old MCX, which is still working on releasing a commercial product, faces intense competition in mobile payments from established players like PayPal Inc. and from hugely popular entrants like Apple Inc. While MCX has been market-testing CurrentC in several cities, it is widely thought that availability in more markets will arrive this summer.

MCX also faces challenges in maintaining the full support of its 62 merchant members, most of which are petroleum companies, restaurants, and big-box retailers like Wal-Mart Stores Inc. and Best Buy Co. Inc., in the face of new services like Apple Pay, which is supported by all the major card networks and many major bank issuers. Indeed, Apple announced Monday that Best Buy has agreed to accept Apple Pay in its mobile app and will accept it in its 1,000-plus U.S. stores later this year.

Mott argues it’s only a matter of time before other MCX merchants, especially those that sell electronic products, follow suit. “I expect Wal-Mart and Target [Corp.] and others will comply with [Apple Pay] by August, too, in order to get more Apple products to sell,” he tells Digital Transactions News by email. “Business is business.”

An MCX mandate that requires member merchants to support CurrentC exclusively is expected to expire by August, Mott says. The mandate generated considerable controversy when Apple Pay launched in October and two MCX merchants, CVS and Rite-Aid, temporarily shut off contactless capability on their point-of-sale terminals to block Apple Pay transactions. The exclusivity provision was never intended to be permanent, Davidson said at the time.

Another challenge Mooney will have to confront is that the MCX payments platform relies on technology from Paydiant Inc., a startup company that was acquired in March for $280 million by rival PayPal. Mott argues this deal is likely to require a close working relationship between MCX and PayPal. “What\'s more interesting for MCX is what a PayPal partnership might bring to the table, if/when that happens,” he says in his email.

Davidson’s own brief tenure was marked by growth but also controversy. Besides the Apple Pay dust-up, the company in October admitted an embarrassing hack of a vendor that was managing customer email addresses. That incident forced a clearly uncomfortable Davidson to field multiple press inquiries.

Some observers remain skeptical that MCX can achieve its ambitions. “MCX as a vehicle to enhance merchants’ existing proprietary credit, loyalty, and rewards programs ought to be eminently viable. MCX as a merchant-led national general-purpose payment scheme is still a long shot,” notes Eric Grover, principal at Minden, Nev.-based consultancy Intrepid Ventures.

But while Mooney will have to contend with a number of issues—not to mention the sometimes conflicting agendas of MCX’s members—the company boasts advantages that will likely give it a crucial lift in the marketplace. Among these are its promise to reward customers while chopping transaction costs well below typical card interchange levels.

“Don’t count MCX out by any means,” says Mott. “If MCX can field payment options that are both more merchant-friendly and more secure, the hurdle of getting consumers to shift off of high-fee credit cards becomes much more viable.”