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After eight months of experimentation in Columbus, Ohio, Merchant Customer Exchange LLC on Monday issued a statement from chief executive Brian Mooney announcing it is putting off a national rollout of its CurrentC mobile-payments service to an unspecified date. Mooney added that the Boston-based company, formed in 2012 by many of the country’s biggest retailers, also has laid off 30 staffers in light of a need for “fewer resources.”
The decision to put a national expansion on ice would also seem to cast a shadow on the Columbus pilot itself. Asked about whether MCX will continue the pilot, an MCX spokesman tells Digital Transactions News, “No decision has been made.”
Mooney’s statement is vague concerning where MCX will concentrate next, though it hints at the possibility of deals with unnamed banks along the lines of one MCX struck last fall with JPMorgan Chase & Co. “[We] don’t want to go into too much detail about strategy, but MCX is refocusing to capitalize on our unique ability to enable and scale mobile-payment solutions, creating a new model for the industry,” the spokesman says.
In the Chase arrangement, the banking giant will include the CurrentC application in its budding Chase Pay mobile-payments program, set for launch this summer. The deal is expected to give MCX a potent shot in the arm, as Chase will automatically load its 94 million cards in the CurrentC wallet. These card accounts generate 12 billion transactions annually.
“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 including working with financial institutions, like our partnership with Chase, to enable and scale mobile-payment solutions,” Mooney said in his Monday statement. No final determination about the pilot has been made, the spokesman says. “MCX had not announced a timeline for a national rollout,” he says. “We’ve not made any decisions yet about the Columbus beta but…it’s been quite valuable.”
Still, progress in Columbus has been slow. The CurrentC pilot finally got under way Sept. 15 after weeks of delay, while many participating merchants reported lackluster usage as late as December. Mystery-shopping forays organized by Digital Transactions News found a number of checkout clerks who were unaware of the payments service, along with spotty staff training and consumer promotion in around the Ohio capital, which is often used for consumer-goods testing.
CurrentC also has been hampered by a limited range of payment methods, including the TargetRedCard credit and debit card and automated clearing house transfers. Mooney last fall indicated that open-loop alternatives would be added later. Meanwhile, alternatives like Apple Inc.’s Apple Pay, Alphabet Inc.’s Android Pay, and Samsung Electronics Co. Ltd.’s Samsung Pay, all of which have launched over the past 20 months, already offer a wide range of open-loop payment card.
At the same time, some of MCX’s stalwart backers appear to be introducing or investigating wallets of their own, which could compete with CurrentC. Wal-Mart Stores Inc., one of MCX’s founding members, launched its Walmart Pay app in December, and Target Corp., another MCX merchant, is thought to be investigating its own mobile-payments application. Like CurrentC, Walmart Pay links mobile phones to checkout-counter readers via barcodes, but unlike the MCX app it includes general-purpose cards in its wallet. Meanwhile, both Wal-Mart and Target are accepting CurrentC in Columbus.
Overall, merchants accepting CurrentC in Columbus include sellers from a variety of industries, among them grocer Giant Eagle, petroleum marketer Shell Oil, discounter Target Corp., and hamburger chain Wendy’s Co. Some 40 major retailers representing 70 consumer brands are behind MCX.
While the Columbus pilot appears to have fallen short of MCX’s expectations, some observers say focusing now on bank relationships, like the one with Chase, could make a big difference for MCX. “It makes sense to focus on making the Chase relationship work,” says Rick Oglesby, president of AZ Payments Group LLC and senior analyst at Double Diamond Payments Research, Centennial, Colo. “If they can make that agreement into one that benefits all parties involved, they can demonstrate the value of direct merchant-to-financial institution relationships and hopefully create a model that can be replicated across more and more banks.”
Others are more pessimistic, pointing out that the postponement is more likely a death knell, at least for CurrentC in its current form. “This [announcement] might be a Monty Pythonesque ‘I’m not dead yet,’ but the evidence seems to state otherwise,” says Nick Holland, an independent analyst who follows mobile payments.
If this proves to be the end of CurrentC, Steve Mott may have delivered the eulogy. “It was the most noble and longest-lasting merchant collaboration that I know of,” says Mott, principal at Stamford, Conn.-based consultancy BetterBuyDesign and a former advisor to MCX.
