MCX Chief Davidson Strikes Defiant Tone While Touting Benefits of CurrentC’s Wallet

By John Stewart

Merchant Customer Exchange LLC (MCX) has launched its CurrentC mobile-payment service with “thousands” of consumers in “several American cities,” the program’s chief executive said on Wednesday.

The “consumers,” employees of retailers that make up the Needham, Mass.-based MCX consortium, are part of a pilot for the fledgling CurrentC wallet, which is expected to launch commercially next year.

Speaking to attendees at the Money20/20 trade show in Las Vegas, MCX’s Dekkers Davidson appeared defiant while also working to dispel what he called “misconceptions” that have emerged concerning CurrentC, which has been in development for nearly three years. The mobile service has attracted attention, not all of it flattering, in the wake of the launch of Apple Inc.’s competing Apple Pay service.

Two MCX merchants that accepted the Apple wallet in its first few days turned off their terminals’ near-field communication (NFC) receivers to deny Apple Pay transactions, generating bad publicity for MCX in the general press. Then, a vendor MCX used to manage some CurrentC-related email addresses was breached last week, adding to the fledgling service’s woes. “The only thing worse than being talked about is not being talked about,” Davidson joked at the start of his speech.

The breach raised inevitable questions about CurrentC’s security, but Davidson was quick to assure the audience that MCX is not asking users to give up sensitive account information. “We do not require drivers’ licenses or Social Security numbers,” he said. “That’s never been the case.”

As he has done in recent days, Davidson stressed what he called the “open” character of the CurrentC wallet. The service, which will support merchants’ loyalty programs, will welcome cards of various kinds, he said, including what he called “open-loop” credit cards, without naming any network brands. He also made plain that CurrentC will work as a standalone app but also will be usable as part of a bank app.

“I want to be clear: we’re looking at an open network here. Consumers can engage with us through their bank app,” he said. “The American consumer is going to choose the winner here.”

Indeed, Davidson attributed much of the negative publicity about CurrentC to the efforts by the 80 merchants that control MCX to “challenge” a payments business that has largely left merchants on the sidelines. “Some have mocked us or laughed at us, some are attacking us,” he said. “That’s to be expected when you challenge the status quo.” Later in his remarks, he returned to this theme, saying, “If you’re going to change the status quo, you’ve got to challenge the status quo.”

While Davidson also underscored ways in which CurrentC will make life easier for consumers who use it in participating stores, he did not address the question, which cropped up during the controversy over the decisions by MCX members Rite-Aid and CVS to turn off NFC, over whether MCX merchants face penalties if they accept rival mobile wallets in violation of MCX’s exclusivity policy. NFC would enable MCX members to accept wallets such as Apple Pay, Google Wallet and Softcard. In remarks he made during a press conference last week, Davidson appeared to indicate merchants can avoid fines if they drop out of the consortium. But Davidson told Bloomberg television on Tuesday that MCX’s exclusivity provision will be gone in a matter of months and that there are no fines; violators will simply go to the back of the line as the network plugs in its acceptance points.

CurrentC’s benefits for users will include digitized receipts and coupons for ease of checkout in stores; multiple forms of payment, including not only open-loop credit cards but also reloadable prepaid cards and private-label cards; no consumer data stored on phones, and all data tokenized with dynamic Quick Response (QR) codes; and usability on 93% of available handsets. Taking an apparent poke at Apple Pay, which works only on Apple’s new iPhone 6 and 6 Plus smart phones, Davidson said, “There will be no need to buy a new phone to use CurrentC.”

Despite his defiant stance, Davidson struck a note of humility regarding consumer sentiments. “You have to have honest-to-God humility to listen to consumers,” he noted. “We have to be smart enough to listen. We’re thrilled to be in the arena.”