MCX’s InComm Deal Might Give Currency To the Idea That Its Network Is Building Momentum

Prepaid card services provider InComm Holdings Inc. announced today that it has struck a “strategic partnership” with Merchant Customer Exchange (MCX), parent firm of the fledgling mobile-payments network owned by merchants and recently branded as CurrentC.

But exactly what the partnership will do for the long-aborning MCX is not clear. Neither company would comment beyond a press release Atlanta-based InComm issued. The release suggests InComm can bring MCX acceptance to merchants for whom it provides various prepaid card services.

“We’re pleased to partner with InComm and leverage their deep relationships and POS integrations with leading retailers representing thousands of locations across the country,” Andy Shober, MCX’s chief sales and business development officer, said in the release. “Our partnership allows us to greatly expand the number of participating retail locations and represents a great opportunity for retailers to seamlessly improve the loyalty, shopping and payment experience for their customers.”

Added InComm executive vice president Phil Graves: “We’re thrilled to partner with MCX and help expand the reach of an innovative offering that represents a big step forward to increasing mobile payment adoption by retailers and consumers alike.”

The release doesn’t say if CurrentC acceptance will be automatic for InComm-affiliated merchants, or, if that’s not the case, what they will need to do to accept the service. InComm boasts of serving “450,000 points of retail distribution worldwide” with prepaid card kiosks and related services. Its Vanilla Reload network has 70,000 locations for reloading prepaid cards, including 7-Eleven convenience stores, Walgreen and CVS pharmacies, Wal-Mart stores, and other major retailers.

MCX already has more than 50 merchants in its fold, including giants such as Wal-Mart, Target, and Southwest Airlines. The CurrentC network will use mobile-wallet technology from Paydiant Inc.

In addition to riding the swelling mobile-payments wave, the stated goal of MCX’s backers is to build an electronic-payments system that costs them less than accepting major-brand credit and debit cards, which collectively cost them billions of dollars a year in interchange and network fees.

“It looks like InComm may serve in some way as a merchant acquirer to take those transactions,” says Ben Jackson, director of the Prepaid Advisory Service at Maynard, Mass.-based research firm Mercator Advisory Group Inc. “The idea here is MCX wants to take transactions off the mainline networks.”

Jackson adds that, depending on the partnership’s details, InComm could give MCX a nice lift. “It just sounds like…if you have InComm in your stores in any way, you’ll be able to accept MCX,” he says. “The valuable thing here is it becomes a turn-key solution if the merchant already has InComm.”

But while the CurrentC system is being tested in some areas, MCX doesn’t plan a full rollout until some time next year, when it will be available at 110,000 locations, according to a statement the company issued early this month, weeks before the InComm announcement. CurrentC’s availability will come about three years after MCX’s founding retailers disclosed they planned to develop an alternative-payments system, and after Apple Inc.’s new Apple Pay mobile-payment service is up and running.

“They’re not building up any consumer awareness,” says Jackson. “Meanwhile, Apple Pay is running full-steam ahead. If they want CurrentC to become a strong brand and get strong usage, they’re going to have to work to make themselves seem like a viable brand.”

MCX reportedly demands mobile-wallet exclusivity from its merchant members. Apple Pay’s initial list of acceptors includes many big merchants, but the only overlap with MCX’s announced base is Target, and only its e-commerce site, not its physical stores. It remains to be seen if powerhouse marketer Apple can build a customer base big enough to demand that CurrentC merchants also accept Apple Pay.