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CyberSource Peak Season Fraud Management Guide

Retailers Cram Another Payment System Into Bulging Mobile Wallet

Retailers Cram Another Payment System Into Bulging Mobile Wallet

Yet another contender has jumped into the battle for mobile commerce dominance. MCX is backed by several major retailers, and it boasts a flexible payment solution with a customizable platform. The world of mobile payments is brimming with hopefuls, with everyone from Google to Sprint vying for traction.

By Richard Adhikari E-Commerce Times ECT News Network
08/15/12 12:06 PM PT

A group of major retailers in the United States on Wednesday announced a new mobile commerce platform, Merchant Customer Exchange (MCX).

Members include 7-Eleven, Best Buy, Lowe's, Sears Holdings, Target, Walmart, Shell Oil and Sunoco.

The group will announce more members over time.

Business at Snail's Speed

MCX is still searching for a CEO, and it's not yet clear how much money each member will contribute, according to The Wall Street Journal.

MCX is still developing its mobile app, and the initial focus will be on a flexible solution that will offer merchants a customizable platform. The app will be available through virtually any smartphone, the organization said.

"The MCX plan, as I understand it, is initially to have a mobile wallet, which would compete with similar offerings from Google and Isis," Thomas Goldsmith, spokesperson for the Electronic Transactions Association, told the E-Commerce Times. "Beyond that, it's not clear yet what MCX plans to do."

MCX did not respond to our request to comment.

Welcome to the Mobile Payments Jungle

There's a plethora of mobile payment options available today. Perhaps the best known is Google Wallet, for which Google has signed up American Express, Visa and Discover. Several large retailers are partnering with Google for this mobile payment option.

MasterCard has its own system, PayPass.

The Isis network has been set up by wireless carriers -- AT&T, Deutsche Telekom's T-Mobile USA unit, and a joint venture between Verizon Wireless and the UK's Vodafone Group. HTC, LG, Research In Motion, Samsung Mobile, Sony Ericsson and DeviceFidelity will implement Isis' standards.

Sprint is reportedly working on its own digital wallet.

Starbucks has its own mobile payment app, and it recently signed up Square to process its mobile payments.

PayPal is another heavyweight in the mobile payments area and says it's gaining traction in the field.

There are several other smaller players in the market, such as LevelUp, and MobilePayUSA.

The lure of the mobile payment market is the huge amount of money to be made -- Gartner predicts that worldwide mobile payment transactions this year will be close to US$172 billion.

Gotta Have Rules

The multitude of players in the industry has led the Electronic Transactions Association to set up a mobile payments committee earlier this month to bring some form of order to the field.

This committee is an industry-wide task force whose membership includes all four mobile major network operators -- AT&T, Verizon, Sprint and T-Mobile. Other members include credit card networks, card payment processors, developers, financial institutions and device manufacturers.

The committee will develop and implement industry-wide solutions to the policy and business issues surrounding mobile payments both in the U.S. and abroad.

ETA has not yet decided whether or not to reach out to MCX, but it's "interested in promoting the growth of mobile payments and seeing that innovation in this field continues," ETA's Goldsmith said.

It's the Customer, Not the Technology

The real driver for adoption is the consumer, not the retailer, mobile operator or payments company, David Stone, cofounder and CEO of CashStar, told the E-Commerce Times.

"For any mobile payment system to be a success, there have to be benefits for the consumer, such as convenience and speed," Stone explained. "Even more importantly, [there should be] tangible benefits like rewards, incentives and a personalized shopping experience."

Further, there needs to be a universal way to make mobile payments, Stone averred.

Whether that will be Near-Field Communications (NFC), as used in Google Wallet and many other mobile wallet solutions, or something else, remains to be seen.

"It is so early in the evolution of mobile payments that no one can say right now what consumers and merchants will eventually decide is the best option," ETA's Goldsmith pointed out. "Competition is inevitable as new companies enter the field, and consumers and merchants will benefit in the end."


CyberSource Peak Season Fraud Management Guide
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