The Merchant Customer Exchange (MCX), a mobile payments initiative created by major retailers, will use technology from FIS to speed processing and provide access to accounts at a large range of financial institutions.

"We've talked a lot about what our plans are and how we plan to process mobile transactions, but there have been questions about how we are going to do that," says Dodd Roberts, an MCX executive. "We're not building from scratch — we're utilizing the power of an existing provider."

The MCX mobile wallet is still in development, and Roberts would not say when he expects it to be released. FIS will provide MCX with payments processing, network infrastructure, routing and settlement, the companies announced July 11.

"FIS is the largest processor of bank accounts in the nation, if not the world," says Richard Crone, a payments consultant. Through this deal with MCX, "you have merchants going straight to the processing source, not going through card networks or intermediaries," he says.

FIS has recently bolstered its mobile payments technology with its March acquisition of mFoundry, and has also launched its own real-time payments network.

"FIS will provide connection to just about every major financial institution," Roberts says. FIS did not comment on the deal by deadline.

"This [MCX deal] allows FIS to rival First Data, TSYS and other major merchant processors," Crone says.

MCX also recently signed a deal to run its cloud-based mobile wallet on Gemalto's Allynis Mobile Payment platform.

MCX's FIS deal does not change its relationship with Gemalto, nor its plan to use a software-based system to execute mobile payments. "Gemalto is building the mobile wallet, and the cloud technology, and FIS will provide the processing," Roberts says.

MCX, which was founded in 2012, is a consortium of merchants that are building a mobile wallet that can work across retailers, including 7-Eleven, Alon Brands, Bed Bath & Beyond, Best Buy, Brinker International, Circle K, CVS/pharmacy, Darden Restaurants, Dick's Sporting Goods, Dillard's, Dunkin' Brands, Gap, HMSHost, Hobby Lobby Stores, Hy-Vee, Kohl's Department Stores, Lowe's, Meijer, Michaels Stores, Pacific Convenience & Fuels LLC, Phillips 66, Publix Super Markets, QuikTrip, RaceTrac, Sears, Sheetz, Shell Oil, Southwest Airlines, Sunoco, Target, Wakefern Food, Walmart and Wawa.

Kohl's is a relatively new addition to the exchange, and adds substantial heft to the network, Roberts says.

"Kohl's is a significant addition to the list of owners," Roberts says, adding MCX's merchants have hundreds of millions of consumer and loyalty accounts, "and Kohl's substantially adds to that."

Scale is important to MCX's retailer-led mobile wallet model, which would place the merchants in a position to collect payments data and control consumer enrollment. The merchants will individually control marketing and other programs that derive from the payments data, Roberts says.

"The data is owned by the consumer and merchant, and it will stay with the merchant," Roberts says.

MCX's retailers combine for about $1 trillion in payments processing and 75,000 store locations. Some of the retailers, such as CVS, have deployed mobile apps that demonstrate some of the potential of MCX wallet.

CVS and other merchant can combine their apps with MCX's wallet when it is released, Roberts says. 

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