MCX prepares to open its wallet to NFC and bank cards

MCX is now open to supporting both NFC and Bluetooth Low Energy for payments and is in conversation with credit card issuers about opening up its CurrentC mobile wallet to payment cards, CEO Dekkers Davidson and COO Scott Rankin have told reporters.

MCX CEO Dekkers Davidson
DAVIDSON: “We can pivot to NFC”

Member retailers who want to accept Apple Pay, meanwhile, won’t be fined but must leave MCX if they wish to accept the new payments service — although MCX member Meijer is adamant that it won’t be shutting down its NFC terminals and has yet to be barred from the consortium.

Information on the potential change of direction came during a conference call in which journalists were invited to put questions to Davidson. The call was then followed by individual interviews with Rankin. NFC World+ was not invited to take part in either and no recording is available, MCX’s press office says, adding that “no news was announced” during the call.

Various news articles produced by those who were invited on to the call, however, paint an interesting picture of how the team is reacting to the success of Apple Pay and the criticisms it has faced following the decision by Rite Aid and CVS to shut down Apple Pay.

“We’re agnostic about technology,” Davidson said during the call, Techcrunch reports. “We started with QR code-based technology that allows us to go to market broadly. If we need, we can pivot to NFC.”

CurrentC was built on QR because that was seen as the fastest way to get the app in consumers’ hands, Davidson added, the New York Times reports. “He noted that people in the industry had largely written off near field communication as a mobile payment option — until, that is, Apple incorporated it,” the article says.

“It’s ironic in a way that we’re talking about a really old technology being employed here,” Davidson said. “Way before Apple Pay, merchants hadn’t enabled it or planned on using it.”

“We started with a cloud-based QR code because it allows us to go to market right away on any phone,” he said, PC World adds. “If we need, we can pivot to NFC at any time. There are also opportunities to work with low-energy Bluetooth.”

That move to supporting both NFC and Bluetooth is already in progress, according to a BostInno interview with MCX technology provider Paydiant co-founder Chris Gardner.

“When CurrentC launches in 2015 it won’t be QR codes exclusively,” Gardner told the publication. “We are very strong advocates of using the right technology to solve the right problem,” he explained. “NFC can do point-of-sale payments well, he said, but it can’t do coupons (QR codes) and it can’t initiate a transaction from the parking lot (Bluetooth).”

“This isn’t just about payments,”  Gardner added. “It’s about marketing and loyalty and being able to get offers. You have to get that mix right. It may or may not include credit cards.” Paydiant also declined an interview with NFC World+ at this time.

Payments cards

That MCX is even considering accepting payment cards in its mobile wallet is a major U-turn as it could defeat the original reason for creating the consortium — to cut transaction fees by cutting out the payments networks.

MCX would not be the first to be forced into a pivot of this kind, however. Softcard, originally formed as Isis in 2010 by US carriers AT&T, Verizon and T-Mobile, also originally planned to develop its own mobile payments service in competition with the existing payments networks and to recruit its own merchants for the new service.

It was forced to pivot in 2011, however, so that instead of competing with incumbent banks and payments networks, it partnered with them to enable US card issuers, brands and merchants to offer NFC-based services to the subscribers of Isis’ founder mobile network operators.

It is not clear exactly where MCX stands on accepting payment cards at this time, however. Davidson said during the press call that MCX was in talks with credit card companies that would allow consumers to load payment cards into CurrentC, PC World reports, while Re/Code says that MCX executives “did give themselves some wiggle room, saying CurrentC will eventually be open to all credit and debit cards, but they didn’t say when that will happen, or which specific cards will be supported.”


Asked during the call about a New York Times article which reported that retailers would face penalties if they accepted Apple Pay, Davidson replied that “there are no fines to MCX merchants,” Business Insider says. “There’s nothing in the structure that would have us do that,” he said. “It’s simply not true. There are no fines.”

Could MCX and Apple Pay ever be used side by side? “In the future, that could be entirely possible,” Davidson said, according to Techcrunch. “There will need to be two to three strong players in the ecosystem. One won’t simply build the market.”

“Merchants make their own choices about their commitment to MCX,” Davidson added, PC World says. “They make their own choice about other forms of payment.”

In an interview following the press call, COO Scott Rankin explained that “despite what has been reported, MCX retailers were allowed to use Apple Pay without suffering any sort of penalty,” Business Insider reports. “However, MCX retailers will have to leave MCX if they want to accept Apple Pay.”

In an interview with Re/Code, when asked about Meijer — a grocery chain that is continuing to accept Apple Pay despite being a member of MCX — Rankin gave what the publication called “a non-answer”, saying that “I think if they want to go forward and continue to accept Apple Pay, down the road at some point if they want to be a customer of MCX and roll out CurrentC and offer it to customers that’s great.”

“In the future I think there will be multiple platforms available not just at MCX merchants but everywhere,” he added.

“Rankin admitted part of the reason why MCX is banning Apple Pay right now is to help get CurrentC off the ground, even though it won’t launch till next year,” Re/Code adds. MCX retailers “want breathing space to get this business off the ground and nurture it,” Rankin explained.

In the meantime, Meijer has no intention of ceasing support for Apple Pay, the merchant told local publication MLive. “We have had the technology in our stores to accept mobile wallets for several years now,” spokesperson Frank Guglielmi explained. “If a customer has Apple Pay capability, our hardware works with it… We don’t plan to remove or disable these systems.

What’s next for MCX?

Officially, MCX is all about cutting transaction fees. In private, however, NFC World+ understands that there is a bigger goal to generate new revenues for members beyond cutting costs.

That will be achieved, we understand, by providing customers with a credit account which functions like a single store card account that works across all MCX merchants so that customers have one credit balance available to them that they can use at any merchant that accepts CurrentC.

This would enable the lucrative interest income currently earned by credit card issuers on outstanding balances to be captured instead by MCX member merchants via a single giant store card scheme.

The catch, though, is that the concept is less likely to scale if MCX is not the only way to get credit for a mobile payment in a participating store — as soon as a customer’s preferred credit card is also available in the wallet, both MCX’s ability to cut costs and its opportunity to generate revenues are at risk.

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2 comments on this article

  1. It sounds like MCX should just issue their own credit and debit cards and be done with it. They can get onto smart phones on apps like Apple Pay, just like any other card. They’re too late to do anything else. Getting loyalty cards onto phones is a separate issue that many are working on, including Apple.

  2. Poor decision by MCX. They say they are technology agnostic, but I tried to use RiteAid’s NFC terminal with an NFC sticker that was not ApplePay and was still denied. Childish decision at best. This is MCX trying to control the transaction instead of giving the consumer options. I will be taking my drugstore business to #Walgreens. Come join me.

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