Sen. Blumenthal Asks MCX to Explain M-Payments Exclusivity Policy (Aug. 6, 2015)
Sen. Richard Blumenthal (D-Conn.) this week sent a letter to the retail consortium Merchant Customer Exchange (MCX), which is readying the launch of its CurrentC mobile payments service, demanding details about its exclusivity policy requiring participants to block rival mobile wallets, along with other information.
Sen. Blumenthal’s request comes months after the exclusivity situation first came to light, following Apple Pay’s October rollout. A group of consumers discovered they were suddenly blocked from using Apple Pay at NFC-enabled payments terminals at CVS/pharmacy and Rite Aid stores that initially accepted it. The stores explained they were no longer accepting Apple Pay, and subsequently MCX—founded in 2012 by major merchants including Walmart, Target and Best Buy—confirmed its policy requiring exclusive participation from its 70 members.
MCX reportedly is testing CurrentC in key markets now, anticipating a rollout later this year of the service, which features a cloud-based platform enabling retailers to integrate payments capabilities and rewards management directly into their own branded iPhone and Android apps. MCX, which has been beset by executive turnover, hasn’t shared many other details about the rollout.
In his letter, Blumenthal cites the benefits of emerging m-payments to enhance the convenience and security of electronic payments, including the use of tokenization to protect sensitive consumer data, and raises concerns about MCX’s intentions with its merchant-exclusivity policy. He asks for detailed answers from MCX by Aug. 30 to a series of questions about whether MCX participants are prohibited from using competing m-payments platforms, including Apple Pay, and whether MCX has enforced its policy. Blumenthal also is asking MCX for details about the transaction data MCX collects when consumers use it for purchases, and a data breach that occurred last year during a CurrentC pilot.
“When merchants choose to work with MCX, they choose to do so exclusively,” MCX’s then-CEO Dekkers Davidson wrote in a blog post last October, adding that if a merchant decides to stop working with MCX, there are no fines.
By April of this year, MCX further clarified its policy when Best Buy, a founding MCX supporter, announced its support for Apple Pay. MCX Chief Operating Officer Scott Rankin told Paybefore that MCX’s exclusivity arrangements aren’t permanent. “The provisions are designed to expire and, as such, are limited in time and scope,” he explained.