A group of 15 top-tier retailers have formed a new Merchant Customer Exchange (MCX) to provide consumers in the United States and around the world with new technology for purchasing a variety of goods while using their
devices. The organization's founding members include 7-Eleven, Best Buy, Lowe's, Publix, Sears, Shell Oil, Sunoco, Target and Wal-Mart.
"The list of members speaks for itself [given that these] companies already collectively account for about $1 trillion in annual ," an MCX spokesperson told us Wednesday. "We are going to have tremendous scale once we hit the market."
The initial focus is on developing a mobile application for enabling smartphones and other wireless devices to make secure purchases in the widest possible range of retail environments.
"We want and fully expect to offer a very versatile solution that can work in just about any type of retail environment -- whether at the gas station, the hardware store or supermarket," the organization's spokesperson said during a telephone interview.
A Cross-Platform Smartphone Strategy
Though the enabling MCX technology is still in the development stage, the organization said its initial aim is to build a secure e-retailing mobile app that will be made available on virtually all smartphones. What's more, the initial efforts will be laser focused on providing participating merchants with a customizable platform with the features and functionality they need to best meet the needs of their customers.
To make this happen, however, MCX must address the complete range of requirements demanded by participating financial institutions as well as merchants of all sizes and types. Still, the consortium's members believe that the development of a unified mobile e-retailing solution will be highly beneficial for participating merchants and consumers alike.
"As merchants, no one understands our customers' shopping and payment experience better than we do," said Mark Williams, president of financial services at Best Buy. "And we're confident that together we can develop a technology solution that makes that experience more engaging, convenient and efficient."
Meanwhile, MCX is actively seeking the support of other major merchants. The organization said Wednesday that it expects to announce additional MCX members in the months ahead.
Enormous Financial Stakes
It is also clear that MCX must ensure that its upcoming mobile app is completely secure and bug free from day one, given that the financial stakes are enormous. According to a new report from Juniper Research, the scale of global mobile payment transactions is expected to rise nearly four-fold over the next five years to over $1.3 trillion -- with physical goods sales from mobile and portable devices accounting for an estimated 30 percent of all e-retailing transactions by the end of 2017.
Juniper expects that mobile e-retailing growth will be driven primarily through sales of physical goods as both remote purchases as well as near field communications (NFC) transactions. The research firm estimates that remote mobile purchases will account for 50 percent of the total value of mobile payments by 2017, and with NFC technology accounting for an additional 4 percent of retail transitions on a global basis.
Now that NFC standards are in place, marketing efforts will need to be scaled up dramatically to enable the fledgling contactless technology -- which requires device proximity of a few meters with respect to the point of sale -- to fulfill its potential, noted the report's author Windor Holden.
"While we are now seeing significant deployments of contactless , consumer awareness is extremely low," Holden said Wednesday. "Thus, it is imperative for all members of the NFC value chain to engage with the public to heighten its profile as a simple, intuitive payment mechanism."
Posted: 2012-08-17 @ 5:15am PT
Very scary considering mobile devices can be hacked into within minutes. Who is going to pay for all of the fraud and charges from the bad guys? Are we just going to consider it a cost of doing business? The technology is not there yet unfortunately.
Posted: 2012-08-16 @ 3:50am PT
Informative article. I work for McGladrey and there's a white paper on US online retail on the website ( http://bit.ly/HJbEFy ), with information on E commerce, defining its scope within the retail industry