MCX and the perils of ignoring the customer experience

Written by on May 18, 2016 in Guest Blog with 1 Comment Sherine Chuah Sherine Chuah

MCX serves as a lesson to all in the ecosystem. Merchant Customer Exchange (MCX) has paid a heavy price for ignoring the fundamentals that govern whether or not Digital Live services and ecosystems will be successful. MCX is an attempt by the retail industry to break Visa and Mastercard’s stranglehold on payments with a mobile-based payment system.

In theory this makes a lot of sense as retailers operate by making wafer thin margins on huge volumes meaning that it hurts when card companies take even a small slice of the transaction.

  • Unfortunately, MCX assumed that because it had the support of the biggest retailers in USA, that the user experience did not matter.
  • Consequently, what emerged was a clunky, difficult to use payment system using multiple QR codes that has also proved to be somewhat insecure resulting in a couple of security breaches.
  • The result has been that both its retailers and their customers have refused to adopt the system and former partners now working to ensure that their offerings are compatible with market leader Apple Pay.
  • This is why MCX has “postponed” the nationwide roll out of the app, fired 30 of its staff and will now concentrate on partnering with banks.
  • To heap further humiliation upon MCX, this coincides with Walmart (once its biggest backer) launching its own payment system in 600 stores across Texas and Arkansas.
  • It seems that Walmart has learned something from its hapless partner as its system is much less cumbersome than MCX despite still being based on QR codes.
  • However, even in this form, it has little hope of competing against Apple Pay which uses the iPhone’s NFC chip and a compatible terminal to offer a best in class user experience.
  • The simplest and most important rule for any user oriented Digital Life service or ecosystem is ease and fun of use (RFM Law of Robotics No. 1).
  • Smartphone users now have so many options to choose from that anything that it is not intuitive, quick to learn and easy to use will, in all likelihood, fall by the wayside no matter how good the technology is.
  • Without a reasonable score on ease of use, RFM’s other 6 Laws of Robotics do not really matter as the users are likely to drop the service or ecosystem very quickly.
  • This problem is most often encountered by technology companies that let the engineers who build the technology also design the user experience. .
  • What the user inevitably ends up with is a bare bones offering that is unappealing to look at and painful to use.
  • Sony’s user experience that runs the PlayStation 4 is a great example of this and I think that Sony is lucky that in this generation, Microsoft got it very badly wrong at launch and is still paying the price for it.
  • This is why user experience design is so important in the current environment and those that ignore it are likely to fail no matter how good their innovation is.
  • Apple, Google and increasingly Facebook and Microsoft have a pretty good grasp of this concept but this is something that Samsung, Sony and many other Asian companies really struggle with.
  • With the exception of China, which is a law unto itself, there is no change to the current outlook where the big ecosystems of today look set to dominate the markets of tomorrow.

This article was first published at RadioFreeMobile.

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About the Author

About the Author: Dr Richard Windsor is the founder of Radio Free Mobile which is an independent research provider. The research helps clients to understand and evaluate the players in the digital ecosystem and presents a unique perspective on how all the pieces fit together in an easy to read and digest way. The product is available on a subscription basis and counts members of the handset, telecom carrier, Internet, semiconductor and financial industries as its subscribers. RFM is the land of the one man band meaning that Dr. W. also makes the tea. .


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  1. Max Baxter says:

    The problem is not the QR code. Look at the Starbucks enormous success with their system (22% of sales today). The solution is also NOT some version of Apple Pay that is also quickly disappearing into an obscurity of niche system. But the comment of UI is right on target. The payment system must be: extremely simple in sign up and use, ubiquitous/universal, competitive in replacing small cash payments (you cannot have a 10-20 cents fee on a $2-5 dollar transaction – freedom from IX networks is a must) and be well integrated with non-payment transactions (offers/promotions, loyalty, etc.). It must also promote merchant interests – or they will not promote it in exchange.

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