MCX Is Chase Pay's Key Cheerleader in Best Buy Deal

Electronics giant Best Buy will accept Chase Pay mobile payments in its stores, a move that clarifies the Merchant Customer Exchange's new role as distributor for Chase's QR-code-based system.

Best Buy, a member of retailer joint venture MCX nearly since its inception, signed a multiyear deal with Chase to accept the mobile pay system in its stores, on BestBuy.com and in the Best Buy app.

Chase is expected to launch Chase Pay late in 2016, or early 2017, for in-store and app-based transactions. It is currently live with some online merchants.

“MCX merchants use our solutions to bring choice and options to consumers across the U.S.,” said Brian Mooney, CEO of MCX, in a Sept. 14 release. “The collaboration among MCX, Best Buy and Chase demonstrates the value of MCX’s core concept: linking top merchants like Best Buy with financial institutions like Chase for the benefit of Best Buy, their customers and Chase cardholders.”

It's a tune MCX had in mind when bursting onto the payments landscape four years ago with the intent to create a payments scheme that would lower merchant costs and keep customer data in their own hands. The different twist is that Chase Pay has taken the place of any retailer-based mobile payment initiative.

The decisions of Best Buy the past few years have been critical in gauging where MCX as a whole might find its footing.

In the spring of 2015, Best Buy was one of the first MCX members to break ranks in its acceptance of Apple Pay and its Near Field Communication technology at the point of sale.

At that time, it was believed MCX members were avoiding NFC payments until the joint venture could roll out its own QR-code-based CurrentC mobile wallet. 

But MCX cut staff and folded its CurrentC wallet four months ago, not long after establishing a relationship with Chase, which was offering merchants lower fees, a key aspect of transaction acceptance it had been seeking in developing its own payment scheme.

"MCX is not a viable entity on its own anymore," said Gil Luria, analyst with Los Angeles-based Wedbush Securities. "At best, they will do deals like this where they will facilitate the co-promotion of mobile payments between retailers and banks."

Because a stand-alone MCX application is not likely any longer, the retailer venture will simply coordinate mobile payment acceptance for members, Luria said. "That is a very important role for MCX, especially because Chase Pay could be a very prominent bank mobile wallet and cooperation with retailers is important," he added.

Even though the CurrentC wallet "was a long shot" because of the difficulty in getting all retailers to agree on a model developed within MCX, its concept is carrying over to other retailer wallet models.

"Walmart Pay and others will be built on the basis and technologies of what CurrentC was about," Luria said. "It will be especially effective if a retailer has the frequency of behavior from its customers."

That concept falls in line for Chase Pay as well. Best Buy joins Phillips 66, Shell and Starbucks as major retailers already signed up to accept Chase Pay. Phillips 66 and Shell are MCX members, with Shell being the first to sign up for Chase Pay four months ago.

“We’ll partner with Best Buy to deepen relationships with our common customers by integrating offers and rewards into the payment experience to deliver a seamless experience at the point of sale,” said Jennifer Roberts, president of strategic alliances and loyalty solutions for Chase, in the release.