Recently, the news came out that Walmart and other companies that are part of the Merchant Customer Exchange (MCX) consortium would be blocking mobile payments from Apple Pay, Google Wallet, and others. The reason for doing so was obviously that MCX has its own mobile payment system, CurrentC, coming next year; but, Walmart's defense of its decision shows just how clueless the company really is.
Here's what Walmart told Business Insider
on the matter:
There are certainly a lot of compelling technologies being developed, which is great for the mobile-commerce industry as a whole. Ultimately, what matters is that consumers have a payment option that is widely accepted, secure and developed with their best interests in mind. MCX member merchants already collectively serve a majority of Americans every day. MCX's members believe merchants are in the best position to provide a mobile solution because of their deep insights into their customers' shopping and buying experiences.
Sounds fairly reasonable at first pass. Obviously consumers want a payment option that is "widely accepted" and "secure". But, here are the troubles with the statement:
- There are only 54 merchants who are part of MCX, and approximately 110,000 locations that will accept CurrentC. On the other hand, Apple Pay is currently available at 220,000 locations, and Google Wallet is accepted anywhere that takes MasterCard PayPass, a number somewhere close to 500,000 retailers in the US with plenty more coming as the changeover to EMV happens by October of 2015.
- Given that breakdown, it's hard to see how Walmart makes the leap to say that MCX merchants "serve a majority of Americans", unless what that means is that the majority of MCX customers are American (grammatically, this reading is plausible.)
- NFC payments in general are seen as very secure, and Apple Pay is especially so because of the TouchID fingerprint scanner.
All in all, it seems hard to imagine that MCX and CurrentC will last all that long, if it ever even makes it to market. MCX isn't trying to take on just Apple or Google really; it is also trying to take on MasterCard and Visa, who are spearheading the move to EMV. Given that MCX has no banks on its side, no clear release window for CurrentC, and a mobile payment method based on QR codes, it seems like a losing proposition.
Although, word has it that even Walmart has no delusions of winning this fight. Supposedly, Walmart CEO Lee Scott said that he doesn't care if CurrentC is successful "As long as Visa suffers."