Moving Forward Mobile Payments

As projections for mobile payments adoption continue to increase, it seems more companies and organizations want to get involved.

Wednesday's announcement of the formation of a new mobile commerce platform from a consortium of large retailers is just the latest in a line of mobile payments-related initiatives. The Merchant Customer Exchange, as the consortium is called, will be offering a mobile wallet designed to work with virtually any smartphone, and be able to integrate a wide range of consumer offers, promotions and retail programs, said the group.

Rick Oglesby, senior analyst with Boston-based Aite Group, believes the MCX announcement, "has the potential to be a huge step," in mobile payments adoption moving forward in the U.S. Oglesby says that merchants have a big opportunity to fill a gap that payment networks cannot, as merchants have data that they don’t share with payment networks. If the participating merchants can come up with a way all of their data can be shared on a scalable basis --something that may prove difficult because some of the merchants involved are competitors -- the partnership has the potential to be a great boon for mobile payments, he says.

"I think of it as a merchant data network rather than a mobile payments network," he says. "By creating their own network, they can standardize how this data can be made available and utilized, which could be the ticket to making mobile customer engagement and payment solutions actually work."

The MCX said it is seeking to address "the needs of financial institutions and merchants of all sizes to better serve consumers in the growing mobile marketplace," though the group didn't give any specifics as to how financial institutions come into play with the network. But Oglebsy believes the MCX will begin to reach out to banks, as well as PayPal, to help facilitate payments and allows the group to begin to circumvent traditional payment networks.

"Obviously they'll still need to use Visa, MasterCard and Discover, but this gives [the MCX] the opportunity to integrate their own payments products and find banks that are willing to participate."

Ultimately, says Oglesby, the success of mobile payments will not be about just offering a cool, new way to pay for something.

"Mobile payments in general have found traction in areas where it can focus on customer engagement, and not so much the payments themselves," he notes.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio