Was MCX too Merchant-Focused?

by Ben Jackson 0

 The failure of the MCX digital wallet CurrncyC came about because the product was trying to solve a problem for merchants instead of customers, according to an article in the Boston Globe.

The merchants who formed MCX “had a world view that they were going to show up on the scene, and everyone would bow at their feet,” says Max Metral, a former PayPal executive and entrepreneur who built some of the earliest mobile wallet technology, in 2010. “But the world right now favors companies that don’t try to get everything right at the beginning, but have the ability to tack and move left and right, and eventually get things right. That’s what you’ve seen Apple doing with Apple Pay.”

This is an important point about the ability to get technology out and operational before the world changes too much. Another mobile wallet that tried to get everything right from the beginning was the ISIS mobile wallet, which rebranded into Softcard. It tried to build a working system that could handle a variety of payments, and starting with something that could also pay transit fares seemed like a good idea. Then it ran into the name trouble, a long launch time that gave competitors a chance to get into the market, and the unfortunate naming issue. One wonders whether iterative releases might have shaped the landscape differently.

The article says that one of MCX’s problem is that it planned to pull money directly from a bank account, which people aren’t used to. While that may be true, a number of decoupled debit apps, such as the Cumberland Farms SmartPay app, have made this work. Though it does note that the issues of purchase protections and rewards needed to be sorted out by MCX.

Ultimately, though, the article’s summation appears to be to be correct that the overriding focus on eliminating credit card fees, which could be a unifier among a disparate group of merchants, ultimately may have meant that the focus did not end up in the right place on this particular mobile wallet.

Even in the venture’s name, the word “merchant” came before “customer.” And that doesn’t fly in this customer-centric age.

Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group

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