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Chase’s Technology Deal With MCX Is Likely to Boost Chase Pay As CurrentC Declines
March 13, 2017

By John Stewart

The long downward spiral of Merchant Customer Exchange LLC reached another milestone Friday with JPMorgan Chase & Co.’s announcement that it is acquiring technology assets from MCX. The money-center bank will use the technology to help launch its fledgling Chase Pay mobile wallet with more merchants. Waltham, Mass.-based MCX is the creator of the merchant-controlled CurrentC mobile-payments system.

Image Credit: JPMorgan Chase & Co.
An image of the Chase Pay app.

Chase did not announce terms of the deal except to say it will close “in coming weeks.” Nor did it give specifics about the assets beyond calling them “payments technology.”

"MCX took advantage of this opportunity to have the solution expanded to the broader merchant community," said MCX chief executive Brian Mooney in a statement. "As a privately held company, MCX does not discuss specific details of this or any other transaction." A Chase spokesperson refused to comment beyond the release, but sources tell Digital Transactions News the technology likely involves loyalty applications MCX has been working on.

Chase became an important partner of MCX late in 2015, when the merchant consortium announced it was linking CurrentC to Chase Pay, a new digital wallet the bank ultimately launched commercially in November at Starbucks and Best Buy locations.

But MCX has stumbled in its efforts to create a mass consumer market for CurrentC. In May, it said it was postponing an expected rollout of a test it was conducting in Columbus, Ohio, and also laying off 30 staffers. The next month, it shut down the pilot and delayed the rollout indefinitely. In the meantime, some MCX member merchants, including the giant chains Wal-Mart Stores Inc. and CVS Health Corp., launched their own mobile wallets and began rolling them out to customers. Another MCX stalwart, Target Corp., is widely rumored to be working on its own mobile-payments service. "The MCX owners either individually or within MCX will continue to pursue solutions beneficial to consumers and merchants," said Mooney's statement.

For its part, Chase, too, has been seeking ways to make its Chase Pay product more appealing to consumers as a bank-sponsored wallet for use by Chase’s 94 million Visa card holders. In December, for example, it announced a deal with LevelUp to make use of the Boston-based company’s order-ahead-and-pay functionality for restaurants. Last month, Chase announced deals for Chase Pay acceptance at HMSHost airport and roadside restaurants and to pay for parking within Parkmobile LLC’s app.

But Chase Pay has encountered some friction related to in-store acceptance (the app also works online and in-app). Steve Mott, principal at Stamford, Conn.-based consultancy BetterBuyDesign, tested Chase Pay at Starbucks stores and found that the app’s quick-response code has required multiple attempts to get a read, leading cashiers to default to a contactless transaction using Apple Pay. “Since many of the wallet users are likely to experience their first Chase Pay transaction at one of the thousands of Starbucks shops, this makes for a rocky start,” Mott says by email.

With the MCX technology deal, however, Chase may be positioning itself for a stronger in-store experience. "I would expect Chase Pay to re-introduce itself after its rocky soft launch late last year and incorporate some of the snazzy loyalty apps MCX was working on,” Mott tells Digital Transactions News. “That, plus the leverage from LevelUp, look more likely to get its mobile wallet into the game."

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