Just days after the formation of a mobile payment standards group, an alliance of major retailers is forming its own mobile payment company.
The Associated Press reports that Merchant Customer Exchange (MCX) will consist of:
The companies combined account for about $1 trillion in revenue per year, and more are expected to join. The companies are cooperating to create a mobile app that integrates coupons and loyalty programs with a payment method that would take the place of cash or a physical credit card.
The announcement comes only a few days after a similar joint effort called the Mobile Payments Committee (MCP) to establish mobile payment standards that could be used across retailers. There are no companies in common between the two initiatives, making them likely competitors.
Neither alliance includes Square, which was recently tapped to handle mobile transactions at Starbucks. Other competitors are members of MCP. Major credit card companies each have their own mobile payment apps, as does Google with a product called Wallet. Verizon Wireless, AT&T, and T-Mobile have a joint system called Isis, and PayPal is also a competitor.
Exactly how MCX will function is not yet clear. Similar programs are typically linked to a consumer’s credit or debit card to provide funds for use while shopping. The app is still in development and the companies involved are searching for a CEO, according to USA TODAY. The app will be available on “virtually any smartphone and will initially focus on enabling merchants to provide offers and promotions.”
Worldwide mobile payments totaled $105.9 billion in 2011 and are expected to total $171.5 billion in 2012 and $617 billion by 2016, said USA TODAY, citing figures from Gartner Research.