MCX Looks To Pad The Mobile Wallet

C-store retailers are backing the venture, making it different than competitors

Point-of-sale (POS) transactions are about to change significantly.

Concerned about a host of processing fees levied at the POS by credit and debit card providers, a large group of retailers in the convenience and petroleum retailing industry, including 7-Eleven Inc., Alon Brands Inc., QuikTrip Corp., Sheetz Inc., Wawa Inc., Hy-Vee Inc., Shell Oil Co., Sunoco Inc. — and the recently announced RaceTrac Petroleum Inc. — have joined forces to create Merchant Customer Exchange (MCX), a new player in the payments industry.

"There are many aspects of the legacy payment system that merchants are not wild about," MCX spokesperson Jeremy Mullman told Convenience Store News. "The system hasn't really changed since the 1950s. We've always used the plastic card with the magnetic stripe."

MCX, whose official launch date has not yet been announced, will be a mobile wallet and mobile payment provider. The Irving, Texas-based company will not only provide payment processing, but also store customer information in a mobile wallet via the cloud.

Once launched, consumers will simply need to download a mobile application (app) to make their smartphones MCX compatible. The company is also developing a way for its system to work within a retailer's already established app, the spokesman noted.

Once the consumer downloads the proper app, transactions will be done utilizing a barcode system, which most retailers already accept, Mullman said. This means retailers should not need to upgrade their current POS hardware and software to accept MCX payments.

Retailers currently investing in MCX are considered "founding members," meaning they are spending their own money in order to take a stake in company profits, as well as be involved in the mobile payment provider's decision-making process.

However, any convenience store retailer will be able to utilize MCX's payment platform in exchange for a yet-to-be-determined fee. "Considering 7-Eleven, Sheetz and Wawa are among those at the table, you can rest assured that MCX will be able to meet all c-store retailers' needs," Mullman stressed. "For MCX to work, we can't only have giant multibillion-dollar merchants. We want it to work for a corner store with just a couple of shops, too."

MCX faces plenty of competition from Google, PayPal, Square and Isis. But the fact that MCX has so many c-store chains already involved in its formulation is one reason the company believes it compares more favorably to its mobile wallet peers.

"Nobody is running away [as a winner] in the mobile wallet space yet," Mullman said. "The first thing we will hang our hat on is the breadth of acceptance. Just based on the list of retailers we have right now, about 80,000 store locations are involved. They process about $1 trillion in combined transactions per year, employ about 4 million people and have 650 million payment loyalty accounts between them. That is a lot of scale."

Founding members of MCX include retailers outside the convenience channel as well, such as Bed Bath & Beyond, Target Corp., Wal-Mart Stores Inc., Dunkin' Brands Inc., Sears Holdings Corp., Gap Inc., ShopRite Supermarkets and Darden Restaurants Inc.

Once available to consumers, the mobile wallet will not be called MCX. "It will have a consumer-facing brand name, and we will share that at the appropriate time," Mullman concluded.