Does Walmart Pay Indicate That MCX is Dead?

by Tim Sloane 0

The lack of visible progress for the MCX CurrentC wallet has always spurred talks of its demise, but the announcement of Walmart Pay has convinced some that MCX is indeed dead:

Here is what Forbes published:

“Walmart, the largest retailer in the world, has just fired the biggest salvo in the mobile payment wars since last year’s launch of Apple Pay. The Bentonville, Ark. giant announced it is starting to rollout Walmart Pay, a smartphone-based payment solution that will work with all credit cards, debit cards and Walmart gift cards at its own U.S. stores. Walmart Pay will run on both Android and iOS and should be available nationwide by the middle of next year.

But the big news, which Walmart neglected to mention in its press release, is that in dropping this midnight bomb just two weeks before Christmas, the retailer isn’t targeting Apple Pay. Instead, it’s essentially blowing up MCX, the Walmart-led consortium that was formed in 2012 and has been desperately trying to roll out an Apple Pay competitor called CurrentC. Exclusivity agreements signed by MCX partners led to strange results when Apple Pay launched last year. Drugstores CVS and RiteAid explicitly disabled their NFC, contactless payment devices to thwart the use of iPhone payment. (RiteAid has since restored Apple Pay functionality.) Target, another MCX partner, allowed Apple Pay in its app, but not in stores.

Walmart has essentially taken the technology behind MCX and rolled out a single-merchant version for its own stores. It works a little different than both Apple Pay and Google’s equivalent Android Pay. With Walmart Pay, you open an app on your phone and scan a barcode on the register screen at checkout. That sends a signal to the register you will pay via the app and allows the backend system to send you an itemized receipt of your purchases to the smartphone. It also means payment is handled seamlessly by whatever credit or debit card you’ve linked to the app. The implementation is a bit clunkier in that you have to trigger the app and complete a scan. But the receipt functionality isn’t yet available from Apple and is a nice addition.

Perhaps more importantly, this move could easily signal a death knell for MCX and CurrentC. MCX’s requirements for exclusive deals were limited in duration, and some early signees like Best Buy and Kohl’s have already begun offering Apple Pay and/or Android Pay. Given that CurrentC has never advanced past limited testing in places like Columbus, Ohio, it’s not clear the endeavor has much of a future at this point. The essential selling point was that it was a single solution for many merchants with integrated features like loyalty programs. Plagued by a series of delays, though, that selling point has become less compelling. Apple Pay now supports loyalty programs, with Walgreens offering the first such integration. Kohl’s store card is one of the first to work with the Apple Wallet, as well.”

This contention was refuted a few months ago by Walmart in a conversation Mercator. They claimed then that they remained committed to MCX and the Walmart Pay press release states this (highlight by Payments Journal):

“ ‘The simplicity and ease of Walmart Pay comes not only from how it works, but also in how it’s been built,’ said Daniel Eckert, senior vice president, services, Walmart U.S. ‘We made a strategic decision to design Walmart Pay to work with almost any smartphone and accept almost any payment type – even allowing for the integration of other mobile wallets in the future. The result is an innovation that will make the ease of mobile payments a reality for millions of Americans.’ “

There are many benefits delivered to the existing 22 million Walmart app users that upgrade to Walmart Pay, including shopping lists, receipts, pharmacy ordering, more convenient in-store pick up of ordered items, and of course payments. There are a large number of possible extensions to this app, for example Savings Catcher could in theory be implemented directly within this app using the receipts and hence available to all Walmart Pay customers. Everyone will need to wait to find out what extensions Walmart adds to Walmart Pay and what the final diagnosis is for CurrentC.

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

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