Loyalty Truth

It seems one thing everyone in the payments business can agree on is a catchy acronym. Four letters or less is the norm, with Visa, MC, Amex being the most familiar in the group. That said, I wonder if I’ve just uncovered the reason Discover lags the group?

There are new entrants bidding for leadership in the payments world, each hoping to take the spotlight via a mobile wallet app that will change the way people make purchases. ISIS, Google (they need to work on that acronym) and MCX are the prime competitors in a race that ultimately only one will win.

Today, we’ll take a quick look at MCX. Just what is it, who’s behind it and how might it become a household name in the next 18 months?

First of all, its important to understand that at this time, MCX is an organization, not an app. MCX was founded by a group of leading US merchants which banded together to create a mobile commerce solution that, in their opinion, would serve the needs of customers and retailers alike better than the current payment system.Over 40 national retail brands are members including Best Buy, CVS, Dunkin’ Donuts, Kohl’s, Lowes, Olive Garden, Sears, Southwest Airlines and Walmart. Most of the major fuel retailers – ExxonMobil, Phillips 66, Shell, Sunoco- participate as do leading convenience retailers 7-Eleven, Racetrack, Sheetz, and WAWA.

MCX is working on creation of a cloud based mobile wallet solution. With the support of the participating retailers, the app will have broad acceptance once launched, offering high utility to consumers and wrapping it in an aura of trust. Wallet is a good term to describe what is being created as we expect that loyalty program information, e-coupons, health care, identification and maybe other personal consumer data will be managed in the app.

It is expected that the app will work on all popular smartphone platforms out of the gate and will have security features that will meet the demands of today’s hacker threatened world.

Benefits to consumers include the flexibility and utility of having a payment source with them on board the device they carry most often, their mobile enabled smartphone or tablet. Being able to consolidate promotions, coupons and loyalty information will make it easy for consumers to get the deals they are looking for with less fuss. As the world gradually shifts towards mobile payment solutions, “don’t leave home without” will truly be referring to a mobile phone rather than a rectangular piece of plastic.

For merchants, the benefits speak to the true motivation behind the MCX project. Decades long domination of the payments system by Visa, MC, Amex has worn thin the patience of retail executives searching for a way to reduce payment processing costs. Banding together to create their own solution ensures a lower cost future for retailers and also opens the door to more control and visibility into consumer purchase data. MCX and the other mobile wallet projects are seeking to effect a strategic paradigm shift, putting cost control and business intelligence on their side. Let’s hope that the value gained from both areas is reflected back to consumers one day.

The winner of the mobile wallet war will have a big check mark next to these qualifiers:

1. Creates a ubiquitous acceptance footprint almost immediately upon launch
2. Backed by a group that consumers can trust
3. Able to be implemented at retailer POS without requiring enormous investment for equipment retrofit
4. Works reliably with an intuitive user interface
5. Has security elements built in at launch that are as ironclad as bright minds can build MCX is one of the most private groups on the planet

You won’t find much on the MCX website except for a listing of members and some high – level marketing talk. We’ve gathered what we know from a variety of sources, all of which remain anonymous as no-one wants to talk out of turn prior to actual product launch. We respect that approach.

Given what we know, each of the 5 qualifiers above receive a big check mark. With the most notable retailers behind MCX, they have to be considered the leading candidate to take leadership in the mobile wallet wars and change the way the next generation pays for their purchases.