MCX in danger as Rite Aid breaks ranks

MCX in danger as Rite Aid breaks ranks

In another blow to retailer-led mobile payments consortium MCX, US drugstore chain Rite Aid is activating support for rival products from Google and Apple across the company's 4600 outlets nationwide.

Rite Aid was one of two MCX consortium members who switched off support for Apple Pay when it made its debut in the US last year.

The Walmart-led MCX consortium is currently conducting pilot trials of its own mobile payments app, CurrentC and has relied on exclusivity agreements with member firms to keep out competitive products.

The first sign of a crumbling in the ranks came in April this year, when electronic retailer Best Buy announced that it would board the Apple Pay bandwagon as soon as its exclusivity contract with MCX expired.

Rite Aid says it will begin accepting Apple Pay and Google Wallet - as well as tap and pay credit and debit cards - from 20 August. The company will also accept Google’s forthcoming rival to Apple Pay, Android Pay, at launch.

MCX is in danger of being left behind as contracts with member firms expire. The consortium is still no nearer to a full-scale commercial roll out three years after the idea was first mooted, although reports from earlier this month suggest that a pilot with a handful of merchants in Columbus, Ohio, is scheduled for late August.

Comments: (2)

A Finextra member
A Finextra member 12 August, 2015, 05:45Be the first to give this comment the thumbs up 0 likes

I don't like being dictated to when I want to make a payment. MCX is a reaction against credit card company fees and interchange fees as business costs. We need to have a better system of electronic payments that does not have any rent seekers and gate keepers, or if we are wedded to them in one way or another to have them highly regulated for the benefit of the public. What is in the public interest should always be paramount in our system electronic payments.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 12 August, 2015, 13:45Be the first to give this comment the thumbs up 0 likes

MCX joins MNO carrier billing and attempts by a few others to challenge credit card interchange fees and then failing miserably to come up with an alternative that costs less and is available within realistic timeframes. End of the day, for all their cribs about high interchange costs, merchants know that it makes more business sense to get some business by incurring the applicable MSC / MDF cost rather than losing business by refusing credit cards and their applicable processing costs.