MCX has announced Inmar will be the promotions management and processing vendor for its CurrentC mobile payments system, but it has not revealed the names or number of consumer goods manufacturer participants, a lack of disclosure that analysts say challenges the launch's credibility.

“Making an announcement without listing the actual specifics is violating 'public relations 101,' which is to be credible,” said Richard Crone, a payments consultant. “Inmar, without a list of supporting CPGs and brands, is a distraction.”

The vagueness could be a deliberate attempt to generate demand, Crone said. “MCX could have done this purposely to try and create a feeding frenzy,” Crone said.

MCX announced "Inmar will leverage its extensive manufacturer relationships, digital coupon technologies and promotional expertise to provide MCX with content, offer management services, and processing and settlement solutions. This partnership will enable CurrentC users to effortlessly access savings from many of the country’s largest and most popular brands."

Representatives for both Inmar and MCX would not reveal which—if any—of those manufacturers have agreed to engage with CurrentC.

“They can’t give the name of one manufacturer or any dollar value of any discounts,” said Tim Sloane, vice president of payments innovation at the Mercator Advisory Group. “The lack of clarity regarding who what when where and how much is pretty breathtaking.”

MCX's statement said “a number of top consumer packaged goods companies (CPGs) have already engaged with Inmar to provide MCX with offers spanning a variety of product categories. The number and collective value of offers will continue to grow as CurrentC prepares to broaden its Beta rollout in Columbus, Ohio in the coming weeks.” Representatives of both MCX and Inmar declined to provide details.

 “Until launch of the pilot, information regarding the number and name of the brands involved is proprietary and in some cases contractually confidential,” said Shannon Lally Hanington, the Inmar senior manager for corporate communications. “Of course, once the pilot goes live, all of that information will be public and available.”

The partnership does have a large potential addressable market. Inmar has direct relationships with many of the largest consumer goods manufacturers. What is not clear are how many—if any—of those companies will opt to participate in an MCX trial or deployment.

An MCX official, who asked to not be identified, said MCX will be able to leverage huge consumer goods companies both through Inmar’s current partners and the current CG partners of key retail members including Walmart, Target, Exxon, Dick’s Sporting Goods, ShopRite, Rite Aid, Kohl’s, 7-Eleven and Bed, Bath & Beyond. “MCX brings strong merchant and CPG relationships, and Inmar of course brings additional CPG relationships,” the MCX official said. “Both sides bring their own to the partnership, but I can't go into any detail about which ones.”

The power of Inmar in this space is “market-defining. Inmar has been doing this for more than 30 years and they have access to the largest inventory of offers. The reason this is hugely important is that more than 90 percent of the advertising spend today comes their (partner CG) brands. Ninety percent of Inmar inventory today is through inserts, paper coupons. This is a broken process,” Crone said.

MCX is trying to position CurrentC—its mobile wallet—as taking the digital coupon to the next level, by marrying it to the payment method.

“Part of the significance here is that CurrentC will be able to incorporate item-level promotions. Because CurrentC ties into the POS systems of each merchant, MCX can enable SKU level offers. I.e. they can offer a discount on a specific brand of candy bars, compared to one just on a total shopping cart,” the MCX official said. “CurrentC is the only mobile wallet that can do SKU level coupons across multiple merchants.”

Few would argue that seamlessly and intelligently integrating item-level coupons into a mobile wallet would potentially be huge and it would, for the moment, offer something that ApplePay and PayPal do not. But the strength of such an offer would come from how often shoppers would find the offers compelling—and that directly relates to how many of the largest CG names opt to participate in the MCX trials.

The real negotiating point will involve pricing, Crone said, and the circumstances surrounding any payments. “The business economics of participation are in flux. If you extend an offer, how much will you share with the platform that enables the offer? Is it going to be Google established rates or higher? Those economics are being defined in parallel,” Crone said.

There are three likely options: The advertiser can pay based on eyeballs, aka impressions. The advertiser can pay on clicks, meaning paying $X every time someone clicks to look at a specific coupon; and pay only on redemption, meaning that nothing is paid until a shopper buys the product and uses the coupon.

And if the largest CG players have a say, there will be a fourth option, which is to let the largest companies get into the MCX network for free, on the rationale that having P&G or Nabisco in the program could benefit MCX more than it would initially help those brands.

The PG companies might say, according to Crone, “We're happy to provide these offers as an incentive for using this wallet. This is a starting point. You don’t have a leg to stand on, MCX. You can’t prove to me how many users you’ll have. You should be paying me to present these offers. Because without them, you don't have a business model.”

The Mercator Group’s Sloane said another consideration is a potential conflict of interest between retailers who are members of MCX and MCX itself. If one large retailer member has negotiated its own discounts with the most relevant CG companies for their shoppers, would the MCX discounts be on top of those? What if they are deeper discounts? Will that retailer try and renegotiate its deal?

“If an MCX customer walks in and uses my discount to buy the product and also gets additional discounts coming from CurrentC, I think I would say, ‘Something’s  not right here,’” Sloane said. Sloane also asked how customizable would CurrentC be for its retailer members. For example, if a chain already has negotiated their own discount with let’ say Nestle, could that chain block any MCX-wide coupons for Nestle?

But this situation would be very different for smaller retailers who are members of MCX and who don’t have the individual negotiating power. “This would enable MCX to go down market,” Sloane said.



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