Wal-Mart Just One of Many Merchants Behind MCX, Best Buy Exec Says

Merchant Customer Exchange, the planned mobile-payments network by and for retailers, is more than an interchange play controlled by Wal-Mart Stores Inc., according to an executive whose company is represented on the nascent network’s board of directors.

Stephanie Swain, senior director of financial services at electronics retailer Best Buy Co. Inc., made a brief, impromptu appearance on Wednesday before attendees at the 5^th Mobile Contactless Payment Innovations Summit in Chicago to rebut what she views as inaccurate perceptions about the nascent network, commonly called MCX. Some of her remarks referred to comments about MCX at the conference on Tuesday, though they also addressed issues that have surrounded MCX since its founders announced it back in March.

Perhaps the biggest of these issues is whether Wal-Mart Stores Inc., the world’s largest retailer and an MCX member, will be calling all the shots. Not so, according to Swain.

“There are many, many merchants that are involved in MCX,” she said, referring to a news release the network issued on Monday announcing that six more had joined. “I’ve had potential merchants come up to me and say we also don’t want to be involved if it’s just a Wal-Mart initiative … this is not about one merchant, this is about a collection of merchants. We are very, very well aligned.”

Irving, Texas-based MCX aims to lower retailers’ payment costs by diverting mobile transactions that otherwise would go to the bank card networks, which set what the merchants say are unacceptably high interchange fees. But, according to Swain, “that is certainly not the reason MCX was formed. The entity was formed really to give us the ability to engage positively with customers.”

Swain didn’t define what engaging positively with customers means, but her further comments gave some clues. “Secondly, this really is about data,” she said, adding that retailers don’t want to be “disintermediated” from the vast array of data generated by purchase transactions. They’re also concerned about marketing, developing mobile wallets for their customers, and finding ways to comply with numerous standards and implement new payment technologies in an economical way.

“It’s going to be very, very hard for merchants to support all of them,” she said. “I can tell you from a personal perspective that if we have to make a decision about EMV, a decision about NFC, a decision about bar codes, there could be multiple millions of dollar investment required to support all of those different technologies.”

When a retailer asked if MCX would expand beyond mobile payments to process other payment forms, Swain hinted that such an expansion was possible, though not for quite some time.

“I would expect it to be as broad as possible very long term, but certainly in the very short term we have to tackle what’s possible to try to gain acceptance so it probably will be more narrow initially,” she said. “But the intention again is to allow customers to pay at merchants the way they want to pay. Merchants don’t want to turn away anyone because we don’t accept a form of payment, that’s not the intention at all.”

Responding to another question, Swain also said MCX plans to work with financial institutions on matters such as payment cards in mobile wallets, marketing, and other issues, but she wouldn’t provide specifics. “The intention of MCX is not to exclude anyone from the ecosystem and not to play favorites if you will with any one entity or another. So certainly we envision that there will be partnerships with issuers,” she said.

Can often fractious retailers pull all of this off? Swain insists they can, citing their successful joint efforts to get Congress to pass the Durbin Amendment, which put in place federal regulations on debit cards. “That was the first time that’s happened, and I would say MCX is a very fine example of how that’s happening again,” she said.

MCX’s newest members include Bed Bath & Beyond Inc., Dillard’s Inc., Dunkin’ Brands, Gap Inc., Sheetz Inc., and Wakefern Food Corp. Besides Best Buy and Wal-Mart, previously disclosed members include Target Corp., 7-Eleven Inc.; Alon Brands; CVS/pharmacy; Darden Restaurants; HMSHost; Hy-Vee Inc.; Lowe’s; Publix Super Markets Inc.; Sears Holdings; Shell Oil Products US, and Sunoco Inc.

The network’s board is searching for a chief executive and is getting close to settling on a number of technical issues, according to Swain.