Because the mobile payments landscape wasn’t muddy enough, the collaborative effort between some of the biggest retailers to launch their own mobile payments network is set to be announced later today according to a report emerging this morning from The WSJ. A group of over a dozen retailers, including Walmart, Target, 7-11, and Sunoco, Inc. is calling itself the Merchant Customer Exchange (or MCX). They, too, want to add another app to customers’ smartphones which would compete with other offerings from Google (Google Wallet), the carrier-led initiative known as Isis, as well as mobile payments services from companies like PayPal, Square, Intuit, and more.
This is exactly why mobile payments aren’t happening yet: everyone wants a piece of the pie.
The group’s existence and general agenda was first outed in March of this year, also by the WSJ. The details between then and now are still essentially the same. A dozen retailers. Early stages. A mobile app (apparently of the tap-to-pay variety). Concerns around the current mobile payments ecosystem forcing poor ol’ Walmart, Target et al. to take matters into their own hands. The WSJ now provides a longer list of who’s involved. Including those mentioned above, others in the game are Best Buy, CVS, Lowe’s, Royal Dutch Shell, Publix, Sears, Alon Brands (gas marketer), Darden Restaurants, Hy-Vee, and the HMSHost unit of Autogrill SpA. The retailers, whose combined sales are nearly $1 trillion annually, want to push offers and coupons to their customers, the WSJ reported this spring.
Of course they do, but that’s the nice way of saying why they’re really investing into this space: they desperately want access to the customer data that winning the mobile wallet space would provide.
Companies aren’t building mobile payment technology because they genuinely want to provide a revolutionary new way to pay in order to please consumers – there’s no evidence that any of the tech, even Square’s kind of nifty “say your name at checkout” is inherently more efficient than the age-old swipe. No, this is a battle for customer’s info. The same info retailers have been trying to track for years – “can I get your phone number?,” they ask at checkout. But consumers can decline, or give a fake number. And sure, consumers could decline to use a mobile app, too. But if using the app allowed them to receive mobile-only bargains….well, who else is OK with selling a little piece of their soul for 1/2 off tube socks on aisle 6?
With consumer data in hand, retailers would know not just what kind of shopper you are, who you are, what you bought, and how often, but they would have more efficient means to targeting ads at you than ever before. It’s no wonder that all the major players are trying to win at this game.
But as everyone from tiny startups to Walmart tries to win, no one really does. Consumer confusion will be rampant. Wait, I can tap to pay where? Who takes Google Wallet? Square works at Starbucks now? Does Target have a payments app or do I use Visa’s? I can use PayPal at Home Depot, right, or is that Lowe’s? Forget it, I’ll just swipe my card.