MCX's CurrentC showed potential with loyalty-based approach
When J.P. Morgan Chase acquired the Merchant Customer Exchange's payments technology last month, a 5-year saga came to a bitter end.
The payments industry, which has proven difficult to navigate and succeed in over the past decade, claimed another victim.
For every success story such as a Square or PayPal, there are flops such as Bling Nation, Isis/Softcard and Pay By Touch. These products failed for a number of reasons, mostly because they were either ahead of their time (Pay By Touch), or of little interest to consumers (Bling Nation).
One other product, the MCX mobile payments concept, never got the chance to prove its worth, even though it had a couple of things going for it that could have made it successful. It's unfortunate for consumers that the idea never made it past a one-city pilot.
Five years ago, some big-box retailers got together and decided to launch a mobile-payments platform that would do a couple of things.
For starters, MCX wanted to bring down payment card processing costs by creating its own proprietary payments system.
Wal-Mart, one of the most visible and vocal leaders of MCX, for years has battled the card networks over interchange rates. A closed loop-style, retailer-led mobile payment platform that relied on users linking their checking account to the system would bypass the Visa and MasterCard payment rails, essentially cutting out the middleman. Such a move might have saved retailers millions in processing costs every year.
MCX also wanted to create a platform that gave merchants data — lots of it. The purpose behind this was simple: Merchants want insight into consumers' shopping patterns and preferences.
The retailers involved with MCX figured they could extract more pertinent data from their customers if they paid for goods and services using a proprietary system. Those retailers, in turn, could provide their customers with incentives and offers to help increase spend in their stores.
Such incentives and offers might have made CurrentC (the eventual name of the MCX mobile app) a winner for consumers.
Let's forget for a moment all of the problems MCX faced with CurrentC. We all know there were plenty of missteps along the way. Instead, let's focus on what was good about CurrentC: Offers and rewards.
Ahead of the game
One strength of CurrentC was its development around a loyalty scheme. CurrentC was intended to store and automatically apply exclusive offers, coupons and promotions from participating merchants during the payment process.
At the time, this was something that mobile wallets such as Android Pay, Apple Pay and Samsung Pay could not do. In fact, they still do not have all of those features. To date, Samsung Pay is the only major mobile wallet to incorporate a system-specific rewards program, which the company added late last year.
Samsung Rewards came at a time when industry observers were pleading for mobile payments providers to place rewards centerstage in order to drive increased consumer adoption. CurrentC was on the right path.
MCX also planned to add another feature not available from today's major mobile wallet providers. In August 2015, MCX announced a partnership with Inmar Inc. that would have enabled CurrentC users to find and redeem product-level digital promotions. Such discounts would have been applied automatically at checkout. Again, CurrentC was on the right path. And it could have taken it a step farther.
Starbucks three years ago flirted with the idea of licensing or white-labeling its incredibly successful mobile app and loyalty program. We’re not exactly sure what that might have entailed, but such a scenario could have also included a system-specific loyalty program.
Retailers using Starbucks' system theoretically could have banded together to create a loyalty program similar to Plenti. MCX had the ability to follow a similar approach.
The retailer group could have rewarded consumers who stayed loyal to CurrentC merchants. For example, if a CurrentC user were to complete 10 transactions over a 30-day period with the app, MCX could reward the user with an incentive that could be applied at any participating retailer.
This reward might be a $5 credit at a specific retailer in the MCX network, or a $10 credit in a separate CurrentC account (think about how Venmo stores funds in an account until a user "cashes out") that a consumer could use at one of many locations. Merchants could keep their individual rewards programs, but the MCX retailer network could entice consumers to visit multiple partners in the group.
It's highly unlikely that we'll see any of this happen now. Sure, Chase could implement some of what I suggested above. More likely, though, Chase will forge its own path with Chase Pay.
In the end, CurrentC showed a good deal of potential, especially with its focus on loyalty. That was something consumers could have embraced. Going forward it's an approach that other major mobile wallet providers need to consider to increase consumer adoption.
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.