CHICAGO — The key to the success of Merchant Customer Exchange (MCX), the payments initiative formed by major retailers, may be merchants' motivation to stay in control of their customer relationships.
First and foremost, the creation of the new mobile-commerce company was based on retailers’ desire to keep customer data, says Stephanie Swain, senior director of financial services for Best Buy. Swain spoke this week at the 5th Mobile Contactless Payment Innovations Summit, though she stressed that she is not a spokesperson for MCX.
“We can’t lose that customer relationship, because research shows that customers want the retailer to know who they are when they walk in the door at a store,” Swain says.
Under current mobile wallet concepts, such as Google Wallet or Isis, the retailer risks losing control of the consumer data because third parties would essentially enroll the customer into the transaction relationship.
Thus, it was not surprising this week that Mike Cook, vice president and assistant treasurer for Walmart, said the retail giant would not be joining Google Wallet, Isis, Square or any Near Field Communication initiatives. Instead, Walmart would focus its mobile payments development behind the MCX, of which it is a key partner.
Security of mobile payments is a main concern of MCX, Swain says.
In addition, she says various standards and infrastructure come into play if a retailer begins adopting multiple mobile payment methods.
“It is hard to support all of those different technologies, and MCX views it that one standard is the way to do it,” Swain says.
From a marketing standpoint, the retailers are interested in helping customers manage their mobile wallet and view it as an opportunity to engage with the customer, Swain says.
Though Swain did not share technology specifics, it is generally believed that MCX will seek one application to server all retailers. Such an application would allow a specific store’s logo and digital coupons to appear on consumers’ smartphones, depending on which store they are in at the time.
MCX is searching for a CEO and “is close” to announcing its governing structure, which currently consists of a board of merchants voting on various issues, Swain says.
MCX is open to partnerships with all issuers and is not seeking to exclude anyone from the current payments ecosystem, Swain says.
As for the mobile pay technology that will serve as the foundation for MCX, Swain says she expects it to have a narrow focus initially, but to be “as broad as possible in the long term.”
In response to those who question whether so many retailers can cooperate on a payments initiative, Swain says MCX is “very well aligned.”
“For those who say we are unlikely to agree, I would say to look at Durbin [amendment lowering interchange rates],” Swain says.
Retailers came together to have one voice on Durbin, and MCX is another example of that, Swain adds.
Even though MCX has been relatively quiet since its August announcement, Swain says that could change soon.
“There will be plenty of news coming, I promise,” she says.