COPPELL, Texas The Merchants Customer Exchange, a fledgling mobile payments system being created by retail giants fighting the Visa and MasterCard card networks, announced a major milestone this morning, an agreement with FIS to power its mobile commerce network.
The choice of FIS gives the new payments network, known as MCX, connections to more than 14,000 credit unions, banks, retailers and third-party processors in more than 100 countries.
The main reasons for the creation of the new network are the emergence as mobile payments as a means of conducting transactions; of protecting customer data from third parties; and reducing transaction costs, according to people involved in the initiative. “The shift to mobile payments is an opportunity to really improve a lot of things about the legacy payments systems,” Jeremy Mullman, a spokesman for MCX, told the Credit Union Journal this morning. “We are completely open to serving any one of the issuers, but it’s got to be on terms that make sense for all the parties.”
The creation of the network is being funded by the merchant members who become investors upon entry, said Mullman. He would not disclose what the membership fees are or how much the network has raised so far. He also declined to address the issue of the retailers’ fights with Visa and MasterCard and its role in development of the new payments system.
A launch date for the new network has not been set yet, according to Mullman.
This morning’s announcement came as Kohl’s department store chain became the latest big-box retailer to join the new network. Others are: Walmart, Target, Best Buy, Shell, Gap, CVS and 7-Eleven, which have all been fighting Visa and MasterCard for years over interchange fee charged on credit and debit card transactions.
Other members of the new payments network are: Alon Brands; Bed Bath & Beyond; Best Buy; Brinker International; Circle K; Darden Restaurants; DICK’s Sporting Goods; Dillard’s; Dunkin’ Brands; HMSHost; Hobby Lobby Stores; Hy-Vee; Lowe’s; Meijer; Michaels Stores; Pacific Convenience & Fuels LLC; Phillips 66; Publix Super Markets; QuikTrip; RaceTrac; Sears; Sheetz; Shell Oil; Southwest Airlines; Sunoco; Wakefern Food and Wawa.
MCX says any U.S. consumer with a smartphone will be able to use the network’s mobile-commerce network, leveraging FIS’ real-time payments network infrastructure and expertise to authorize and execute transactions in real-time, ensuring secure and instantaneous payments and bypassing the Visa and MasterCard networks.
FIS will provide MCX with a suite of services that will help bring its mobile commerce solution to the marketplace, including payment processing, payments network infrastructure, routing and settlement, allowing MCX to authorize and execute transactions in real-time.
MCX says the mobile payments will occur in-store via bar-code scanning. Either the shopper will snap a photo of a bar code to complete a purchase, or a cashier will scan a bar code that the app generates. Other technologies, such as near field communication, may be integrated in the future.
