The Merchant Customer Exchange, a retailer-driven mobile commerce initiative, announced a partnership that sheds some more light on how its mobile wallet will eventually look.

MCX, which previously said its system would rely on bar codes displayed on a phone's screen, will also support cloud-based mobile payments through Paydiant Inc.'s white-label mobile pay platform.

"The initial MCX solution will be primarily bar code- and cloud-based," says Scott Rankin, chief marketing officer for MCX. That technology combination will allow MCX's planned system "to work on the broadest array of smartphones and at a wide range of merchant locations, where bar code payments can be accepted without major new capital expenses," Rankin adds.

The Paydiant agreement falls in line with what major retailers had in mind when they created MCX in 2012 in response to the growing market of mobile wallets from payment companies and vendors. The MCX wallet is meant to help retailers keep control of their data and transaction costs.

While MCX executives have not committed to a specific launch date or product testing timeline yet, they have steadily announced the initiative's vendor and merchant partnerships. In addition to Paydiant, MCX announced Wendy's and Acme Fresh Market as new participants.

By prolonging the technology development and waiting to have more merchants on board, MCX may have driven past its window of opportunity, says Paul Martaus, merchant acquirer consultant and industry researcher for Mountain Home, Ark.-based Martaus & Associates.

Target is one of the first and largest retailers working with MCX, and its recent card data breach "drove a stake directly into the heart of MCX," Martaus says.

Consumers may have second thoughts when Target and other retailers ask them to link their payment card details to the MCX mobile app, Martaus says. Other mobile payment products, including Google Wallet and the Starbucks app, have had widely reported security issues.

"I am not suggesting that MCX can't overcome this, I just can't figure out how at this point," Martaus says. "Consumers were already concerned about mobile security prior to this." 

With Paydiant in the mix as a cloud-based option, MCX may be shoring up its security, Martaus says.

Rankin says MCX considers security its top priority. The MCX wallet "will meet the most rigorous security standards," Rankin says.

MCX is not revealing its app's technical specifications at this point, but the company is confident that its security measures will go further than any mobile commerce product currently on the market, Rankin adds.

MCX also works with Gemalto to run its mobile wallet on Gemalto's Allynis Mobile Payment Platform. The technology allows MCX to connect other retailers' apps to the MCX wallet.

FIS has signed on to be MCX's payment processor for routing and settlement, also allowing access to accounts at many financial institutions.

"Mobile-commerce in the U.S. is still evolving," Rankin says. "The solution in development incorporates input from customers and merchants to ensure the features and functionality best suit their needs."

MCX believes it will "quickly become the most widely accepted mobile-payment solution in the U.S.," Rankin adds.

When Paydiant landed Subway Restaurants as a client for its mobile payment app last October, Paydiant co-founder Chris Gardner also discussed MCX's potential in an interview with PaymentsSource.

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