Say Bye-Bye To MCX CurrentC

Today, the mobile payments field has been reduced by one.

A statement released by MCX CEO Brian Mooney late yesterday (May 16), via their PR rep, said that MCX and its CurrentC mobile payments product is folding its tent.

The decision, said the written statement, was the result of feedback from its CurrentC pilot and their need to focus on “other priorities,” including its work with Chase and Chase Pay. Mooney said that they plan to lay off about 30 people but suggest that the MCX-owner members “remain committed” to its future.

But not enough apparently to continue to fund and ignite the ill-fated mobile payments scheme.

MCX is the merchant consortia formed in August 2012 with the intention of creating a mobile-only, merchant-owned payments scheme that ran over the ACH rails. The primary reason that MCX was formed wasn’t to introduce mobile payments to consumers as much as it was to reduce the MCX member’s cost of payment acceptance. Members hoped that the scheme would be attractive enough to consumers that many of them would shift away from what they were using in the store – branded plastic cards – to this mobile payments scheme.

When it was launched, MCX claimed that its merchant membership collectively drove $1 trillion in sales annually. Walmart’s Mike Cook was perceived to be the guiding force behind the initiative – long a vocal critic of card networks and interchange.

Karen Webster wrote in her infamous MCX Fairy Tale  in September of 2013 that MCX was doomed from the start and would ultimately be more expensive to support than the members originally anticipated. Coalitions are tricky to begin with, she said, but ones that consist of competing merchants take tricky to a whole new parallel universe. Gaining consensus across merchants with competing businesses and interests also proved difficult – as evidenced by the fact that it took MCX three years to get a product to market and launch a small pilot.

MCX and CurrentC’s waters were muddied further upon the launch of Apple Pay in the fall of 2014. MCX merchants signed deals that prohibited them from supporting any competing mobile payments products. Some of the same merchants who were part of MCX also supported NFC technology – Apple Pay’s enabling technology. Unwitting consumers who used their Apple Pay at MCX merchants with NFC terminals put those merchants in violation of their contracts. Some MCX merchants, like Rite Aid, in response, turned NFC off, which started a huge industry blowback.

That, in many ways, was the quiet beginning of what is now the obvious end of the MCX mobile payments scheme. Apple Pay and NFC found its way into more MCX merchants, who began to explore other mobile payments alternatives. Rumored calls for capital were rebuffed. Last fall’s announcement of Chase Pay and its partnership” with MCX more or less suggested that MCX’s CurrentC mobile payments app was dead as a doornail, despite denials by Mooney.

Then, in perhaps the most overt sign of its finishing blow, in late December 2015, MCX’s “anchor member” Walmart launched Walmart Pay, a QR code mobile payments app that leverages the credentials on file, which includes network branded credit and debit cards.

Here is the official statement from Mooney, received May 16:

“Utilizing unique feedback from the marketplace and our Columbus pilot, MCX has made a decision to concentrate more heavily in the immediate term on other aspects of our business including working with financial institutions, like our partnership with Chase, to enable and scale mobile payment solutions. As part of this transition, MCX will postpone a nationwide rollout of its CurrentC application. As MCX has said many times, the mobile payments space is just beginning to take shape – it is early in a long game. MCX’s owner-members remain committed to our future.

As a result, MCX will need fewer resources. This change has resulted in staff reduction of approximately 30 employees. These are very tough decisions, but necessary steps. For those employees leaving us, we want to thank our colleagues for their hard work and dedication to MCX over the last several years.”

It’s true that mobile payments is the early innings of a long game. But putting men on base means having a proposition that consumers value – which MCX lacked from the very start. Reducing interchange for the merchant solved a problem that was irrelevant to the consumer, as important as it was to the merchants who came together to form the MCX coalition.

If we’ve learned anything over the last several years when watching the mobile payments field take shape, it’s that absent something that solves a problem for a consumer or adds value to their experience, innovators have nothing left but an empty bank account to show for their efforts. And the longer that it takes for the value exchange to be recognized and that “ignition” to happen, the more likely it is that a superior offer comes along to take its place.