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Road to in-store mobile payments is bumpy for Apple Pay, MCX

Bringing contactless mobile payments to bricks-and-mortar stores continues to be a challenging process plagued with technology difficulties, inexperienced store associates and an evolving landscape.

Enabling in-store mobile payments at scale is viewed as a key goal but one that has proven to be elusive over the past few years for a variety of reasons. The latest setbacks include reports of Apple Pay not working at Home Depot stores, Best Buy switching allegiance from MCX to Apple Pay as well as the departure of MCX CEO Dekkers Davidson.

“The consensus decision is that NFC will be the defacto solution for mobile proximity payments,” said Thad Peterson, senior analyst at Aite Group, Atlanta, GA.

“Now we’re waiting for a sufficient number of terminals to accept NFC and a sufficient number of devices that can carry an NFC capable mobile wallet,” he said. “Both of these will grow fairly rapidly over the next 2 to 3 years.”

Home Depot’s challenges
Merchants, credit card networks, banks and other invested parties are convinced that there is significant potential to unlock sales via in-store mobile payments. However, most also agree that this will not happen until mobile payments provide a seamless experience and also bring added value to completing a purchase – two things that have been elusive so far.

One of the most immediate challenges right now is simply getting mobile payments to work in stores.

Home Depot shoppers have reportedly not been able to pay with Apple Pay in some stores this week, which the retailer is attributing to the fact that it is upgrading its NFC terminals, which are therefore inactive at the moment.


The CurrentC mobile wallet from MCX

The Home Depot is just the latest example of in-store challenges with Apple Pay.

In-store support
A Phoenix Marketing International survey published at the end of March revealed that two-thirds of users are encountering problems at retail (see story). Users are encountering a variety of problems, including that a location is not accepting Apple Pay even though the retailers is listed as participating partner, the transactions are taking too long to process and that cashiers are not familiar with the technology.

These issues point to the need for merchants and mobile payments providers to work more closely together to insure a strong user experience.



Despite the in-store challenges, Apple Pay continues to gain steam, this week announcing that it has signed on an additional 24 banks credit unions and financial institutions supporting its service.

MCX is a mobile payments solution developed by a consortium of major retailers. It has been slow to bring its solution to market and is now facing possibly bigger problems, with reports that Best Buy, one of the group’s founding members has jumped to ship and will start offering Apple Pay in its stores.

Soon after the Best Buy news became known, MCX CEO Dekkers Davidson left the company.

PayPal and MCX
A possible bright spot for MCX could be PayPal’s recent acquisition of Paydiant, which powers the MCX solution.

PayPal, which has also struggled to bring mobile payments to bricks-and-mortar stores and is in the process of being spun-off from eBay, could leverage the Paydiant deal to gain a stronger foothold in stores, possibly through MCX.

“Since MCX has limited available information related to their solution, it’s difficult to determine if they have a merchant value proposition that is sufficiently compelling for merchants,” Mr. Peterson said.

“I think that the PayPal acquisition of Paydiant at least provides the opportunity for some form of relationship between PayPal and MCX, beyond use of the Paydiant technology,” he said.

Leading the way
While Apple Pay, PayPal and MCX continue to try to crack the code on in-store mobile payments, they will face competition from Google Wallet, which has been reinvigorated by the resurgence of interested in NFC payments following the launch of Apple Pay as well as by Google’s acquisition of competitor Softcard.

Other solutions to gain a foothold in stores include Samsung Loop, MasterCard and Visa.

“In-store mobile payments are happening and NFC is going to be the transmission technology that gets it to critical mass. NFC terminal penetration is the gating factor right now, but that will quickly be resolved over the next few years with the installation of EMV terminals with NFC capability,” Mr. Peterson said. “Apple Pay and Google will lead the way.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York