While Apple’s rumored launch of mobile payments solution next week is expected to make a big impact, Merchant Customer Exchange – a consortium of retailers – has beat the technology company to the punch with a pilot already in market and significant potential for a quick impact on sales.

Merchant Customer Exchange yesterday unveiled the brand of its new central mobile payment network, CurrentC, as the system backed by numerous major merchants began operation in pilot projects across the United States, heading for a national rollout next year. Users can access the MCX network through the CurrentC mobile application as well as participating merchants’ apps.

“The players in MCX hold a lot of cards,” said Nitesh Patel of Newton, MA-based Strategy Analytics. “They command over $1 trillion in retail sales, and can influence loyal customers to use the application through discounts and offers.

“Starbucks is a very good example of a retailer that is driving mobile payment use among its loyal base of drinkers,” he said. “It last reported 6 million mobile payments per week, around 15 percent of all U.S. transactions, so this shows what can be achieved.

“The other kicker is that retailers will not need to invest significantly in new POS equipment, which will prove attractive to other retailers that are yet to join MCX.”

Disrupting mobile payments
The private pilot will expand through 2014, with regional and national rollouts to follow in 2015.

Coming amid Isis’ name change to Softcard, rumors that Apple’s soon-to-be unveiled iPhone 6 will include near-field communication for mobile payments, and the approach of another holiday shopping season, the MCX project augers to help transform the mobile retail landscape.

The platform will be available across a broad and growing collection of leading merchants in the big-box, convenience, pharmacy, fuel, grocery, dining, travel and specialty-retail categories.

Given that numerous merchants have invested in the system, CurrentC’s potential to disrupt the mobile payments space is significant.

“It’s a been a long time coming – over two years from initial announcement to pilot launch,” Mr. Patel said. “It’s a remarkable coincidence that both it and Softcard [the mobile wallet initiative formerly known as ISIS] have made announcements prior to iPhone 6 unveiling – where Apple is rumored to be including NFC payment. It is long overdue, in my opinion.

“Our research shows that over 65 percent of US users use their phone for mobile shopping tasks, with a good portion of those doing price comparison, store locating, voucher and coupon finding and redemption. However, paying in store is the least used action – not surprisingly, given limited places to actually pay.”

Retailers participating in CurrentC are not allowed to engage in other mobile payment/marketing initiatives. That stipulation will lead to fragmentation in the US mobile payments market, as some retailers will continue to do their own thing with respect to mobile payments, and will want to maintain NFC enablement, Mr. Patel said.

When rolled out nationwide, CurrentC will be accepted in more than 110,000 merchant locations. It will also offer features and benefits, such as merchant loyalty programs and instant coupon savings, all stored on the phone and available at point-of-sale.

The CurrentC mobile wallet app will be free to download through both the App Store and Google Play store, and is compatible with major smartphones.

Since announcing plans to launch in 2012, MCX has been partnering with some of the biggest retailers, including Walmart and Target, to create a universal mobile payment system that can be used by multiple retailers. At the same time, the company also wants to involve smaller retailers to capitalize on the growing mobile payments trend.

Big retailers have been some of the first to invest in mobile payments because of the lower costs and the opportunity to change the in-store experience.

No-brainer
“The world is still waiting for a no-brainer, ubiquitous mobile payment system,” said Rob Hoxie, vice president, business development and partnerships, vice president of business development and partnerships with Atimi Software in Vancouver, British Columbia.

“MCX seems to have the right ingredients with impressive retail support and the ability to serve within big retailers’ apps but also serve small retailers within the ConnectC app.”

While the approaching nationwide launch is a big development, the system will take until later next year to have global impact.

“Success for mobile payments in general are still tied to behavioral changes en masse,” Mr. Hoxie said. “The fact that MCX may hit the ground running better than others, due to their strong retail backing, should speed up consumer adoption. When consumers see and recognize this platform with brands they already know and trust, that brand trust will extend.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York.