US retailers need their heads read

Written by on October 31, 2014 in Opinion with 0 Comments

Am I missing something or are the retailers behind the Merchant Customer Exchange (MCX) and CurrentC really as dumb as they seem? The latest attempt at providing a mobile wallet as an alternative to established credit/debit cards is doomed to failure and for a market sector crying at the loss of trade to online stores, the move is doubly stupid.

We have marveled at the failure of operator led initiatives like Isis, sorry, Softcard, to make any major inroads. Even Google’s mighty Wallet is not setting the world alight. Then Apple comes along, after a long time assessing the market, with ApplePay that works closely with the established card issuers rather than trying to beat them.

There lies the first lesson, trying to fight the Visas, Mastercards and Amexes of this world and all their banking partners in developed economies is suicidal at best. Even with some of America’s biggest retail chains behind it, CurrentC doesn’t stand a chance at being anything more than a loyalty card, only one of the functions it hopes to master.

The reason I can be so confident in my prediction of imminent failure is that those behind the card are focused on what they can get out of it, not what it will do for the customer. Those customers already have multiple cards in their physical wallets and a number of card NFC options to choose from that allow quick and simple transactions to occur at the checkout. Why they would opt for something as convoluted as CurrentC is a mystery. I certainly wouldn’t bother with it.

I say convoluted but I can only assume that after going to the CurrentC website that is rather scant with information. From what I can garner, the customer will have an app on their phone and at checkout will enter a personal 4-digit code ensuring only they can access the account. Every transaction will also be ‘guarded’ by a secure Paycode (a QR-code) that’s unique to every purchase and has to be ‘shot’ by the smartphones camera, presumably. I’m not even sure where that QR-code resides, nevertheless, the coup-de-grace and the most comforting part of the CurrentC blurb is that your information lives on a ‘highly encrypted cloud’ – so it’s never shared or stored on your phone.

CurrentC will not be available until early 2015 at best, but recent hacking activity may prolong its launch despite claims to the contrary by MCX CEO, Dekkers Davidson. He said the hackers had only obtained access to some testers’ email addresses and what he described as ‘dummy zip codes.’ He said the CurrentC app itself was not hacked and maintained the mobile wallet meets and exceeds industry security standards. Yes, that should fill partners and prospective customers with confidence!

Compare all this with ApplePay that only requires a one-time setup of a card in Passbook. If you only want to use the default card on file you simply hold the iPhone near the merchant’s terminal and place your thumb over the Home button. No personal details go to the merchant and only an encrypted token goes to the card issuer.

In the meantime, eager customers of MCX merchants waiting for the ‘ground-breaking’ new wallet won’t be able to use their ApplePay or any other NFC payment methods in stores like RiteAid, CVS, Walmart and Target because they have switched off their NFC terminals. Like babies they have thrown their toys from the stroller in defiance.

In the meantime, Apple CEO Tim Cook, has reported that over one million iPhone users activated the payment system in the first 72 hours. Who knows what the numbers are today? Guess they won’t be rushing to those merchants that have snubbed their noses at them.

At least one member of the MCX, Meijer, seems to have already broken from the group to accept NFC payments including ApplePay. I will predict that most, if not all the others will follow suit within three months

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About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .

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