MCX Embracing QR Codes, The Cloud And Unparalleled Vagueness

Written by Evan Schuman
January 17th, 2013

Merchant Customer Exchange, the retail group trying to offer its own mobile wallet, plans on using QR codes as the heart of its cloud-based payment app, the group announced Monday (Jan. 14). But beyond the QR code detail and the names of a few new retail members—including Meijer and Wawa—little was discussed during an hour-long panel that meaningfully addressed how the group plans on making a difference, beyond the general platitudes MCX has stressed since its March 2012 launch.

What was different this time, though, is that members were more candid in explaining why they have the goals they do, even if they were not especially forthcoming in how they plan on achieving those goals.

The group said its effort will be cloud-based, leveraging barcodes (which a spokesman later clarified meant QR codes), but MCX didn’t say how purchases would be made. Will the QR codes identify products, a specific POS station or something else? Will it be closer to what Burger King trialed on QR or how Starbucks uses barcodes to replicate its stored-value card? And there were no new hints about when this mobile wallet may materialize at all.

Dodd Roberts, whose title at MCX is simply “executive,” ended the panel by telling the audience that the group had solved the mobile battery dying problem, but somehow neglected to say what that solution was. Is it somewhat more complex than charging stations near every POS or at least several in each store?

Walmart’s Jamie Henry (the chain’s senior payment director) said the group would be using tokenization to protect the payment data, but he didn’t say how such tokens would function. “We’re still passing around 16-digit PANs in the clear,” he said. “This will take them out of the system.”

MCX also clarified its intent that data from one chain will not be shared with another chain. Jay Culotta, the treasurer at regional convenience chain Wawa, said many of the mobile vendors say they are not—today—planning on sharing data, but they refuse to say what will happen down the road.

“It’s not a forever situation,” Culotta said, adding that the temptations for leveraging such data will likely be overwhelming. “It’s unclear what their business case would be without monetizing that data.”

A Lowe’s executive on the panel—VP, Operational Controller John Manna—agreed and painted a scenario where a mobile vendor knew that a Lowe’s customer made regular purchases at Lowe’s and then walked right by an Ace Hardware store. And if an Ace Hardware corporate manager is then talking with that vendor, will the very substantial dollars that Ace would likely pay for that list of customers be set aside? Manna indicated that he would rather not find out.

Walmart’s Henry said retailers as a group made a huge error in the early days of E-Commerce, when they permitted the in-store payment rules—rules that were written by people at a time when E-Commerce was unimaginable—to be applied without alteration to E-Commerce purchases. “We slapped the existing system onto the new world,” Henry said, adding that such a mistake must not be repeated with mobile payments.


3 Comments | Read MCX Embracing QR Codes, The Cloud And Unparalleled Vagueness

  1. Patty Payment Says:

    In this story, Walmart’s person said that the take-all-comers strategy is a bad one. So why create yet another one that requires yet another payment option the consumer has to manage and also another piece of reader hardware at the POS? Faster lines – I think not. Can you imagine when a customer walks into Walmart with his Isis or Google wallet phone and wants to pay and the representative says, sorry – we only accept MCX mobile payments here. You have to go to this web site, download this application, register your credit card, then come back and we will accept your mobile payment – and by the way, it only works at these dozen merchants but thanks, because you saved Walmart money on our interchange rate. Also – sorry we can’t offer you a reward or redeem a coupon for your trouble because that MCX application only works one-way and can’t communicate to the phone, but if you wait a few seconds longer we can query your account in our big customer database in the cloud and try to find you something to give you for your trouble. Oh no!, that is not your QR code on your mobile screen – it belongs to someone else who had their phone hacked and the phone image of that QR code is being mass emailed to ring of thieves rushing to Walmarts around the country buying video games and televisions? Maybe they have this all figured out, but they are very short on details.

  2. Dave Birch Says:

    That’s not the likely mode. It will be more like I go shopping at Target – my Target app opens automatically when I walk in the store – when I get to the checkout my Target app shows a code (just like the Starbucks app) so the Target POS displays “That’s $20.45 thanks Dave” and I punch in my PIN and leave. Meanwhile the funds are pulled via ACH overnight.

  3. Paolo Guerrero Says:

    Or more likely, the myTarget app will say “That’s $20.45 thanks Paolo Guerrero!”


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