MCX says CurrentC is less about tech, more about relationships

The head of the retailer-backed payment system says it welcomes competition and members are free to accept Apple Pay

The company behind CurrentC, an in-store mobile payment system backed by some of the biggest retailers in the U.S., attempted on Wednesday to play down a growing controversy over whether its backers could accept Apple Pay.

Dekkers Davidson, CEO of Merchant Customer Exchange (MCX), said its members, which include retailers such as Walmart, Shell, 7-Eleven, Dunkin Donuts, Sears, Old Navy, Best Buy, Exxon Mobil and Gap, are free to make their own decisions on payment systems.

The comments, which came in a conference call, represented the first time MCX had addressed a sudden flood of online criticism about its technology.

Formed in 2012, MCX had existed largely unnoticed until last week when two of its members -- drug store chains Rite Aid and CVS -- abruptly stopped accepting Apple Pay and Google Wallet, which use a wireless chip payment technology called NFC.

Those decisions put MCX's system, called CurrentC, into the spotlight. CurrentC is based on a barcode that's displayed on a shopper's phone and scanned by a cashier. To many, that's not as elegant as Apple Pay, so it was written off by many tech pundits as doomed to fail.

Though MCX initially kept quiet, pressure on the company to address the issue increased on Wednesday when the New York Times reported that member retailers were contractually bound not to accept competing mobile payment systems and would face "steep fines" if they did.

Hours later, it was also reported that the company had been hacked and the email addresses of users had been leaked.

Davidson confirmed one of its email providers had been hacked but said its payment system had not been compromised. He also disputed the report that retailers faced fines if they chose to accept competing mobile payment methods.

"Merchants make their own choices about their commitment to MCX," he said. "They make their own choice about other forms of payment."

On the call, which lasted about 30 minutes, with reporters asking questions through a moderator, Davidson indicated the driving force behind CurrentC was the relationships that retailers could build with shoppers. The technology used, he said, was secondary.

As envisaged, shoppers will pass certain data about themselves to a retailer when making an in-store purchase with the CurrentC app. The incentives for doing so will be set by retailers, and shoppers won't have to share any information if they don't want to.

"If consumers choose to be anonymous to merchants with mobile, they will be allowed to do that," he said.

Getting a deeper insight into customers and their spending habits is valuable for retailers. Many offer loyalty cards to collect such data, and it's the kind of thing that's missing today when a customer swipes a credit card -- or uses Apple Pay.

But when it comes to technology, Davidson told IDG News Service that the company isn't wedded to its barcode-based system.

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

On the payment side, he said MCX was in talks with credit card companies that would allow consumers to load payment cards into CurrentC. As it was initially proposed, the system only worked with bank accounts.

CurrentC is already being tested in some undisclosed locations in the U.S. It will be launched nationwide in 2015.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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Martyn Williams

IDG News Service
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