What To Watch In Payments In 2015

Retailers, interchange beneficiaries, and merchants all want to circumvent the card networks.




A huge amount of “new” happened among both huge and itty bitty payments players in 2014. Apple, Google, Softcard, and MCX introduced, refined, or expanded major mobile payments initiatives. Among start-ups, 2014 saw a cascade of press releases announcing new apps, processors, loyalty programs, and new intermediaries connecting disparate systems so they can work seamlessly with one another.

In 2015, we’ll see bigger companies (both traditional and non-traditional financial services companies) buying up various pieces of the payments puzzle to assemble what they believe will be payment options that deliver engagement, ease-of-use, value, and excitement to consumers as well as value and loyalty to merchants (and don’t forget, interchange revenue to issuers).

We’ll also see start-ups with significant financial backing acquiring the assets of other mono-line players to position themselves for acquisition (at higher price/earnings multiples), or Goliath-slaying geniuses with must-have products or services.

It’s tempting to say that 2015 may lack some of the fireworks and hoopla of 2014, but don’t worry, there will be some milestone events to look forward to.

Bitcoin Morphs

Bitcoin is just one of many digital currencies offering both finality for transactions (zero chargebacks) and truly one-stop global value. Merchant chargebacks cost an average of $20 apiece (and that’s just from processors), so each transaction reversal makes bitcoin look ever more attractive. And while bitcoin investors can buy bitcoins in their own domestic currency, its transaction value is the same in Tanzania as it is Shanghai.

Bitcoin eliminates a costly challenge for online retailers who ship globally and want to side-step currency exchange/conversion rates. It makes bitcoin even more attractive and together, these foundational features take bitcoin closer to being a “10.”


MCX’s goal is to introduce a mobile payment app that will allow its merchants’ customers to pay with funds directly debited from their checking accounts thereby circumventing interchange expense on every one of those transactions.

Any money the customer would have saved by shopping at a competitor is automatically loaded onto a Walmart gift card or an American Express Bluebird card.

Altogether, MCX merchants have sales totaling more than $1.2 trillion and their collective aspiration is to divert as much of their credit card sales (approximately $240 billion in annual sales) to their own system, CurrentC.

In the second or third quarter of 2015, CurrentC will finally roll out, three years following its announcement. We have seen members of the merchant consortium testing pieces of the coming technology. For instance, Walmart rolled out its Savings Catcher, which allows its customers to enter their store receipt numbers and Walmart then compares the prices paid in-store with prices offered at major stores in the customer’s area. Any money the customer would have saved by shopping at a competitor is automatically loaded onto a Walmart gift card or an American Express Bluebird card.

What does that show us about MCX’s CurrentC? Principally, we see Walmart’s dexterity with huge and nimble databases that can keep track of vast amounts of multi-store, multi-location pricing data and then return value to the customer on a prepaid/gift card. For the retailer, Savings Catcher shows its databases can deftly manage enormous complexity to produce simple solutions that are hugely loved by the customers who have used it.


Next: Rewards And Loyalty For All! »


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Feb. 2, 2015



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