MCX Confirms Retailer Exclusivity for CurrentC Mobile Payments, but No Fines for Leaving Consortium

[HobeSoundDarryl]

There better an opt-out switch. I don't want any data going to retailers.

Then Apple Pay needs an opt-out switch too... not because Apple is flowing data to retailers but because of the banks that underpin Apple Pay are not being held to the same standard Apple is spinning. In case there's any confusion, let's look at an example: you use Apple Pay to buy something. What did you put into Apple Pay to actually facilitate the transaction? Was that a Credit Card? If so, while Apple might not track your transaction details, that credit card is still going to get charged. The bank behind that credit card still knows you bought something. And that bank will mine and sell data all it wants.

If you want no data on you going to retailers, use cash. Everything else can be tracked.

 

[samcraig]

Did you miss the quote from the former Walmart exec saying CurrentC was all about hurting Visa?

As far as extra profit, they only get it if they convince people to give up their debit cards for CurrentC (which I will not be doing). And if forced to stop using my debit card for CurrrentC, I'll switch over to my CC to make sure they get the point that over my dead body will I use CurrentC.

Some people keep missing a vital point. This is not about eliminating the use of credit cards. It's about minimizing the use of credit cards.

IE

If 100 customers use credit cards via mobile payment - Retailer is paying X% per transaction.

However - if only 80 percent use CCs and 20% use CurrentC - Retailer is saving the CC % of 20 transactions.

Now multiply that out for a retailer like Walmart over the course of a year. That can equate to serious money.

Retailers don't need to remove CC payments. They only need to reduce it as much as they can.

 

[UnfetteredMind]

I don't feel like getting into an argument about whether banks behind credit cards are earning their money or not. What I do notice is that their particular steak seems to rule the world. I'm yet to go into any city in any town and find a "meatloaf" company's name on the biggest building in that town. I'm yet to hear any public outrage at the bonuses the "meatloaf" company executives and middle managers get. I'm yet to see the U.S. government quickly rally Republicans & Democrats to bail out a "meatloaf" industry to save them from collapse and then later that same year having those "meatloaf" managers paying themselves the biggest bonuses in history. Etc.

We all know this. If we can tag cable companies as "greedy" leech middlemen between us and shows/movies without seeing any "considerable non-material services that cable companies offer to their subscribers", it should be at least as easy to see the big banks the same way.

What would be really nice is if this more secure payment system appleay, Google Wallet and any others that use the same methodologies and underlying technologies) helped reduced fraud and retailers were able to push them to lower those transaction fees. It may be a pipe dream, but it's possible. That said, I imagine it may well be like taxes, once they're set, they will only ever go up and not down. We shall see.

 

[Rogifan]

Background: The companies in MCX are sick and tired of credit card fees but their replacement payment system is hideous. In addition they want customers to allow themselves to be tracked. Apple has an elegant system which they are sharing for a minuscule percentage of the transaction (a fraction what credit card companies are charging the stores and that fraction is from the credit card companies' take).

Solution:

1. MCX creates their own credit card system and spins it off as a separate entity. The credit cards can be used at any place that accepts MCX payments. The majority of the fees generated will be returned to MCX members so their cost is virtually nothing. Being a credit card, the customer is still protected under credit laws for account breaches. Starting up a credit card company can't be too hard as Sears did it with Discover.

2. MCX includes an option in their agreement that allows purchases to be tracked in return for a small rebate similar to what other credit cards give. Users can opt in to be tracked in return for rebates and loyalty coupons or they can remain untracked.

3. MCX adopts Apple Pay with Apple getting their standard cut which is far less than what MCX members lose to Visa and Mastarcard.

The incentive for users to switch to or add an MCX charge (or even debit) card would be a higher rewards option. Initially an MCX card would only be accepted at MCX member stores but others may adopt it. That wouldn't be a problem for Apple Pay users as they can load multiple cards into Apple Pay so if one card isn't accepted, they can use a different card.

Problem solved. MCX needs to send a one time fee of ONE BILLION DOLLARS for my solution.

So basically what you're saying is most people prefer to pay on credit. Hence why Apple chose to work with the major credit card companies and banks.

----------

No argument against that. I don't think CurrentC is a plot against consumers. I think it's small margin businesses vs. big-pocketed banks. If a consumer wants to pay with some rewards-loaded CC, I'm sure stores will still accept that card. I don't think CurrentC's main focus is on destroying rewards programs attached to CCs; I do think it's about trying to keep more of the profit associated with everything we buy with the store that sold that something (rather than have the banks take a big bite of it).

Sorry if I have little sympathy for Walmart and its profit margins. Do you have data that backs up the meme that banks and credit card company fees are unreasonable for the service they provide? I think it's unfortunate that consumers are in the middle of Walmart's beef with Visa.

 

[flat five]

A creditor generally wants to know how reliable a person is before they offer to lend them money. They also need a way to positively ID a debtor. Banks use the personal information to determine this. If you don't want credit, don't give the information.

So tell me, why does MCX, which does not have the same concerns as the bank, need that information?

i don't have any credit cards.. debit only.
ie- i don't want credit but i'm still required to give out multiple ID, ssn, etc.

so i can't really answer your question.

 

[UnfetteredMind]

I would love to know more details about this statement made in MCX's blog post:

Meet or exceed industry-standard consumer fraud protection.

Is that Credit card industry standard, or Debit card industry standard or what does this really mean? What about transaction disputes?

This is also interesting, perhaps they would go with BTLE beacons instead of this crappy QR code scanning at some point?

Work seamlessly across multiple technologies and use cases including QR codes (which Starbucks has already proven to be successful with 6 million transactions per week), Bluetooth and many more to come.

 

[Arran]

I don't feel like getting into an argument about whether banks behind credit cards are earning their money or not. What I do notice is that their particular steak seems to rule the world. I'm yet to go into any city in any town and find a "meatloaf" company's name on the biggest building in that town. I'm yet to hear any public outrage at the bonuses the "meatloaf" company executives and middle managers get. I'm yet to see the U.S. government quickly rally Republicans & Democrats to bail out a "meatloaf" industry to save them from collapse and then later that same year having those "meatloaf" managers paying themselves the biggest bonuses in history. Etc.

We all know this. If we can tag cable companies as "greedy" leech middlemen between us and shows/movies without seeing any "considerable non-material services that cable companies offer to their subscribers", it should be at least as easy to see the big banks the same way.

For someone who didn't want to get into it, you sure said a lot.

I get it, I'm not a big fan of overpaid banking execs either, but I won't reflexively back a challenger who is clearly incompetent. Not when my interests could be damaged.

But by all means sign yourself up for CurrentC.

 

[flat five]

The issue is not about giving out personal information. Your personal information is out there from the day you were born.. It is already out there with various agencies.

The issue is who would you trust your personal information with? Retailers??

well, it's not like you're giving your personal info to each individual retailer..
and really, i trust rite aid more than jpmorgan/chase (that doesn't really answer your question but just sayin)

 

[HobeSoundDarryl]

It depends, does that system require me to hand over a bunch of sensitive personal information to be stored in the cloud? Does it work with POS systems that are already installed at hundreds of thousands of merchants? Does it allow me to enjoy the same benefits in terms of rewards, fraud protection, etc that my Chase card does?

CurrentC is on the wrong side of every one of those questions. It is a complete non-starter for the consumer. You're asking everyone to give more consideration to the merchant than they give themselves. Might as well tell them to ignore a sale price and just offer to pay retail. Good luck with that.

Any system can have a pile of "what if" flaws. Do we know that this system requires handing over "a bunch of sensitive personal information" or is that one of those things we Apple people have made up to rail against it? Yes, there is some info talking about mining data for coupon and targeted marketing purposes but will that make it through to the final incarnation? You and I don't know.

Does it work with POS systems already in place? Hopefully it does because adding a burden of separate hardware requirements probably makes it flop. Do you or I know for sure today? We don't.

Does it allow you to enjoy the same benefits, rewards, protections as using your Chase CC does? Sure, if you use your Chase CC through it.

As usual, it's like we've convicted the Apple alternative of all kinds of crimes without even seeing the details of what it's about. It's certainly true that it could be the most evil, crooked, earth-dooming concept ever created but it's probably not quite that bad. A bunch of smart retailers believe in it enough to take some short-term pain to try to bring it to market. It may bomb. It may be stupid. It may never make it to market. Etc. But they are simply trying to do what every other business tries to do- maximize profits.

We could look up old NFC-oriented threads from a year+ ago and watch this Apple crowd bash away at NFC much like they now bash away at CurrentC. NFC is stupid. NFC is insecure. NFC is useless. Etc. Until Apple adopts it. Then, all that negative sentiment flips into "I'm not buying anything from any store that won't let me pay with Apple Pay".

Personally, I don't like some of the rumored objectives of CurrentC. But I do like the objective of trying to bring alternatives to market that might benefit small businesses instead of the status quo which just further enriches big banks. There's nothing in that (or my interest in it) about forcing anyone to do anything.

 

[ee4life]

Some people keep missing a vital point. This is not about eliminating the use of credit cards. It's about minimizing the use of credit cards.

Yes, but it's only going to work if the consumer gets something out of it. The idea that CurrentC is better for the merchant means very little to me. I'm not going out of my way to give the merchant everything they want so that I can have a less convenient way to check out.

Make the system better and maybe people will use it. By locking out the competition it shows how they feel CurrentC stacks up on its own merits.

 

[gigapocket1]

Here's a thought...people are saying shouldn't best buy, etc want to avoid paying the cc fees for every purchase.. Wouldn't apple want to do the same? Every transaction with apple just about involves a card swipe.. Maybe.. JUST MAYBE.. Apple got the best of both worlds.. All credit card fees are waived thru purchases of their online and retail stores as well as a small percentage of every Apple pay payment...

 

[ee4life]

i don't have any credit cards.. debit only.
ie- i don't want credit but i'm still required to give out multiple ID, ssn, etc.

so i can't really answer your question.

Well, in the US, banks still need that information for other reasons, such as reporting certain transactions to the IRS.

So, does MCX have similar concerns?

 

[tasset]

OK so what does that mean? How do they "hurt" Visa? By giving Visa less of their revenues for everything they sell. I feel no particular sympathy to a company the size of Walmart but think it through to the small Mom & Pop. Try the local bike shop or non-franchise restaurant. That 2% or so can be a lot of their profit. Do they "hurt" Visa by making other payment options available to their customers such that some of their customers choose to pay through those alternatives? Could it "help" that Mom & Pop store though if some customers would pay through such alternatives so that that 2% or so stays with Mom & Pop?

This is where I can tell you lost your marbles. The retailers cartel involved right now with MCX are giant national chains with Walmart as the ringleader. By the time any "Mom & Pop" got a whiff of this action I guarantee you the entry fees and revenue cuts going back to the founding members will be every bit as onerous as those vicious (but government regulated) banks and processors. Good luck getting regulation on their commercial interests in 'Murica.

 

[0970373]

well, it's not like you're giving your personal info to each individual retailer..
and really, i trust rite aid more than jpmorgan/chase (that doesn't really answer your question but just sayin)

Rite Aid isn't going to refund your back account when it gets hacked. A bank will. So will a credit card company. MCX is doing this.

 

[Rogifan]

Very simply: Visit any store and pick out a product. How about a nice new, loaded iPhone for $1000 (no contract).

Pay by credit card and that store is going to lose a percentage of that revenue to the bank underpinning that credit card. If that's an Apple store, Apple is losing a chunk of the profit (it could have for making and selling us that iPhone) to the bank behind the credit card "we" use.

Pay by cash or check and that store is going to get to keep that same percentage as some extra profit on that transaction.

Consumers sometimes don't like the idea of "extra profits" but this is really about letting the retailer keep some profit or give that profit to gigantic banks.

What about people that prefer to pay on credit? I choose to not keep a lot of cash in my bank account. I put as many bills as possible on my credit card and pay it off every month. Or how about those that can't afford to have everything taken out of their checking account immediately? You seem to just be looking at it from the angle of the fees retailers pay to the banks/CC companies. I known plenty of people who would have a hard time not being able to pay on credit.

 

[flat five]

Well, in the US, banks still need that information for other reasons, such as reporting certain transactions to the IRS.

So, does MCX have similar concerns?

possibly.. i don't know.
they need the info in order to access your bank account though.. i mean, how else are they supposed to get paid?

 

[Arran]

But they are simply trying to do what every other business tries to do- maximize profits.

Yep, and they'd stand a better chance of achieving that by doing traditional retailer stuff to delight their customers, instead of playing cheapskate banker.

 

[SarahPalin]

ahh.. so it was you who taught tim cook that word!

(@ 0:20)
YouTube: video

Youbetcha! I can see Cupertino from my house!

 

[SR22pilot]

liability

HobeSoundDarryl

I understand your comment about eliminating the credit card fees. The problem of increased inconvenience can be eliminated by changing the system. What you haven't addressed is liability. I had someone buy a Dell computer on one of my credit cards. I never got charged. In fact the credit card company called me about a suspicious charge. I have replaced cards after Target and Home Depot got hacked. I am tired of it. I don't see CurrentC addressing that. In fact I see them giving direct access to my bank account and pushing liability back onto my shoulders. I don't use debit cards for the same reason. Apple Pay gives me better protection against fraud and makes the consequences of fraud smaller. If my phone is stolen and I disable my phone I don't need new cards. CurrentC will need to address both ease of use and liability before people will embrace it. It would be much better for MCX to work with Apple on an MCX card that bypassed the credit card companies. However, MCX would have to back it up with a strong liability statement equal to or better than what is provided when using a credit card.

As for consumer information, retailers need to push Apple to include loyalty card in Passbook and to have a way that when a transaction is identified as being from company A then company A is sent the loyalty card number. Users can opt in or out based on whether they store their loyalty card in Passbook or not.

 

[CB1234]

well, it's not like you're giving your personal info to each individual retailer..
and really, i trust rite aid more than jpmorgan/chase (that doesn't really answer your question but just sayin)

If you are giving personal info to MCX, then you are guaranteed that all retailers will get that information....

I agree bankers are bad, just as retailers are. What is annoying is that Apple pay is giving you an option of high security for your cards and make them more secure, and they have stupidly turned it off....

 

[bushman4]

CurrentC model is commparable to the QR payment system available in thy Dunkin Donuts App. While customers frequent their coffee shop It's rare and I repeat the word rare that I ever seen anyone using the Dunkin Donuts App for pay
I think CurrentCs gimmick will be to offer coupons and freebies for use of their system. But I don't believe people aren going to give up bank account info in today's world of hacking

 

[flat five]

Rite Aid isn't going to refund your back account when it gets hacked. A bank will. So will a credit card company. MCX is doing this.

yeah, i get that.. and something i said earlier is that the argument pits the current implementation of both setups as the only two choices.. if the choices really are only pay vs currentc then i'd go with apple pay.. it's easiest and seemingly more secure.

my later points are more hinting that MCX has some good ideas and in many ways, better than what we get with apple pay.. it's just that the current user interaction and security seems crap when compare to iphone/pay..

in this exact debate, i side with both the retailers and with apple.. just wish the best of both setups could combine.

 

[Rogifan]

Some people keep missing a vital point. This is not about eliminating the use of credit cards. It's about minimizing the use of credit cards.

IE

If 100 customers use credit cards via mobile payment - Retailer is paying X% per transaction.

However - if only 80 percent use CCs and 20% use CurrentC - Retailer is saving the CC % of 20 transactions.

Now multiply that out for a retailer like Walmart over the course of a year. That can equate to serious money.

Retailers don't need to remove CC payments. They only need to reduce it as much as they can.

But consumers want to pay on credit. Reduce those options or convenient and secure ways of paying on credit and people will shop elsewhere. What you make up in smaller fees to banks/CC companies is more than offset by the lost revenues due to fewer sales. They'd need to offer some pretty big discounts to get people to give up their credit cards. After all that would the merchants really be coming out ahead in the end?

 

[flat five]

If you are giving personal info to MCX, then you are guaranteed that all retailers will get that information....

I agree bankers are bad, just as retailers are. What is annoying is that Apple pay is giving you an option of high security for your cards and make them more secure, and they have stupidly turned it off....

yeah, that does seem stupid right now.. but if the idea is changing the way consumers pay retailers over the next couple of decades then this week's news is nothing.. it's more important (imo) to consider where we'll be in a few more years once a new system is commonplace/widespread.

----------

Youbetcha! I can see Cupertino from my house!

lol

 

[HobeSoundDarryl]

Ok then going by your argument that MCX sole purpose is to cut out charges levied by banks and credit card companies,

I never said that. I have stated that that appears to be the big goal of it, and, for me anyway, makes this move to temporarily shut down NFC by some big, successful retailers make some sense.

then why do they need a lot of personal information on their customers? Why don't they forego collecting information on their users ?.

They don't need it; they want it. "Know thy customer" is the first tenet of good marketing. Along with the nefarious uses of such information that we can spin, there are positive uses. They've shared the ideas of relevant coupons which could help customers save money. Lots of companies want to "know thy customer" better so that they can try to be more relevant to those customers.

That said though, I'm not a fan of that part of MCX but right now, that's only a part of the concept that may or may not make it to the finish line. If it makes it and the benefits of data are overwhelmed by the negatives of exploiting such data, people will choose not to use it. Lots of these same stores offer "rewards cards". Some consumers swear by them while others avoid them for this very same kind of thinking. If that part of MCX makes it into the final product, maybe MCX is only embraced by those who like sharing such data so that stores can give them benefits like those that come with toting around rewards cards.

To cut out 2-3% charges, they don't need all the personal information, do they?.

No they don't. That's 2 separate things.

I think bankers should do bankers job, retailers should do retailers job... If retailers cut out the bankers and credit card companies, then what, you want bankers to start opening retail stores so that they can maintain their profits?

For about the 20th time now, this is not about completely killing CC companies- just an alternative. We've had alternatives all along (we could pay with cash or checks or barter or layaway). Even if retailers desperately wanted to cut out bankers, they couldn't do it because some consumers won't be forced to change. And that's how it should be.

As for bankers feeling the pain of such an event, no I don't expect bankers to open retail stores. Bankers always find a way to make money. If this could be completely turned off today, they'd just turn up many other ways to make money. Even if a bunch of things worked against them at the same time such that they could all fail, the governments of the world will step in and "save" them at taxpayers expense.

My expectations of this if it does make it to market is that it will be an alternative platform for payment- like CC are now, like PayPal, etc. Software like Apple Pay and Google Wallet might be evolved to also work with it so that consumers can't even tell if it's MCX or "as is" or Paypal actually doing the transactional business behind the scenes. While Apple might refuse to support any data capture elements of MCX, Google would probably go right along and thus Android would adopt the underpinning platform. Then, Android could redo the old Visa (Android/Google Wallet) spin vs. American Express (Apple): https://www.youtube.com/watch?v=4TDz-TVYZrU