Big Retail’s answer to Apple Pay; Current C, could be dying or even dead. Tech Crunch reported that the organization behind Current C; the Merchant Customer Exchange or MCX, had delayed the product’s national rollout.
The problem with that story is that the MCX had never actually scheduled a national rollout of the product. Instead it has been conducting Beta Tests of the payment app at various retailers in Columbus, Ohio. Those tests are continuing but it sounds as if the plans for a national rollout have been scrapped.
This statement from MCX CEO Brian Mooney that Tech Crunch acquired seems to confirm such speculations:
“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,” Mooney wrote in a press release.
“As part of this transition, MCX will postpone a nationwide rollout of its Current C application,” Mooney claimed. After seeing this spin, one has to wonder; how can something that might have never been scheduled in the first place, be postponed.
What is happening at MCX?
Okay so what is going on at MCX and with Current C? Here are some possible scenarios:
- The Exchange ran into unforeseen or unsurmountable technological or logistical problems. A strong possibility is there are security holes that could not be fixed. Another roadblock might be the high cost of installing or developing infrastructure to support the system.
- One or more of the big retailers participating in the MCX; which is supposed to be a consortium of retail giants, has decided to pull out. This is a strong possibility because at least one MXC member; Walmart Stores Inc. (NYSE: WMT), is developing its own solution: Walmart Pay. Other big retailers like Kroger Inc. (NYSE: KR) and Costco Wholesale (NASDAQ: COST) have been conspicuously absent from the Columbus tests. Mooney did admit that his organization was laying off 30 people.
- MCX has decided there is no need for Current C because of the success of rival products like Apple Pay and Android Pay. It might have decided to stop reinventing the wheel.
- Big banks like JPMorgan Chase (NYSE: CHASE); which is developing its own Chase Pay solution, are not cooperating with Current C. The MCX has a partnership with Chase, but it has not announced work with any other banks. Large numbers of banks have signed up to take Apple Pay even though many retailers have not.
- Banks; and possibly credit card processors such as Visa (NYSE: V), might have said no to Current C because the solution is partially designed to eliminate transaction fees they charge to retailers.
- Big retail might have simply concluded that there is not enough demand for payment apps to justify the money and resources being invested in Current C.
- Some executives at Big Retail might have concluded that newer and better technologies; such as Blockchain’s Thunder, might soon make products like Apple Pay obsolete.
Current C’s Troubles could be Bad News for Apple Pay
The Apple-zombie press is hyping up the Current C “postponement” as a victory for Apple Pay, yet it could be a serious defeat for Apple’s (NASDAQ: AAPL) payment app.
The danger for Apple; and Alphabet’s (NASDAQ: GOOG) Android Pay, is that Big Retail has concluded that app payment is a niche product that will not drive many sales. The retail giants’ executives think that contactless payment is simply not worth the time and effort.
The retailers might also be hoping to pass the cost of developing and maintaining contactless payment solutions onto banks like Chase, technology companies like Apple and Alphabet (NASDAQ: GOOGL) and payment processors like Square. Why spend money to develop a technology when somebody else is developing it for you?
Could Blockchain kill Apple Pay?
Another disruptive force that retailers could have their eye on is bitcoin. A company called Blockchain claims to have developed a bitcoin-powered payment solution called Thunder, Tech Crunch reported.
Thunder is supposedly so fast that it could process 100,000 transactions a second, Tech Crunch claimed. Visa; the world’s largest payment processor, can process around 56,000 transactions a second.
Interestingly enough it is not clear if there is a need for such speed. Visa only processes around 2,000 transactions a second and Blockchain only processes around 1.3 transactions a second right now.
Although that speed and the efficiency it seems to offer will probably catch the eyes of Big Retail. Walmart will undoubtedly take a look at Thunder, because that company loves to process payments fast.
Anybody who has ever swiped a card or written a check at Walmart knows how fast that company processes payment. From my personal experience; it appears that the money is out of your account before the groceries reach your bag at Walmart. My guess is that Blockchain will soon be getting a call from Bentonville.
It looks as if the payment wars are entering a new chapter. One has to wonder does Current C’s potential demise signal Big Retail’s abandonment of contactless payment or these companies desire to adopt some other technology.