Pioneering Mobile Payment
Believing in the transformative nature of mobile payments, three c-store retailers came together to discuss why they chose to join cross-channel competitors such as Walmart, Target and Best Buy in the development of a new mobile-wallet platform.
Among several other c-store retailers to opt into the project, representatives from Alon Brands, Wawa and RaceTrac explained their goals and tried to dispel any myths about the Merchant Customer Exchange (MCX).
“The way [plastic payment] works today, all the rules were written against us, done by a third party that never touches our business,” said Tim Patterson, general manager of payment card and retail systems for Dallas-based Alon brands. “They were set from a distance. The consumer never sees what goes on and the merchant takes the brunt of it.”
In addition to having to pay what he feels are inflated interchange fees, Patterson said issues of risk often fall back to the merchant.
Joining a retailer-led effort instead of other mobile wallets that have emerged was a way to take control from a retailer perspective, solidifying more reasonable cost structures and allowing each merchant to own their customer data, said Jay Culotta, treasurer of Wawa Inc., Wawa, Pa.
“Who better to own the data than the merchant who knows what our consumer wants because we’re living with them day to day?” said the third retail panelist, Will Alexander, vice president of information systems and special projects for RaceTrac, Atlanta. “We think we can provide a better solution.”
The group started as members from the Merchant Advisory Group, a trade association of payment specialists based in Minneapolis. Members believed mobile payments were going to be the first truly transformative payment method to come along in years and it would be a missed opportunity not to influence its development, according to Patterson.
Talk of MCX began more than two years ago but became official with the start of MCX about a year ago. Today, the group represents 36 merchants and 90,000 locations, about 50,000 of which are c-stores.
"It was part of the reason we felt we would succeed in that as a group we represented $1 trillion in payment transactions a year, a number of locations and touch points,” Patterson said.
Addressing the concern that large retailers such as Bentonville, Ark.-based Walmart may have a greater influence on the development of MCX, Alexander said processes were in place that would make all voices heard equally.
“It’s collaborative, I would say, [at least] fundamentally,” said Culotta of Wawa. “But once we get to execution, there will be differences based on the retailer. Some will have to do things differently because some of us have to do, for instance, table service. But the technology should be consistent across our different worlds.”
Declining to establish a timeline for development and rollout of the project, Dodd Roberts, representing MCX, Irving, Texas, said the group would rather move at its own pace to develop and execute the steps necessary to build the platform.
“What you will see is us taking an approach to do first and talk later,” Roberts said. “We will have things in the market before making any public announcements. We’ll start simple and slow.”