Merchants don’t like credit cards. The fees associated are onerous and wildly convoluted. For example, I challenge you to find a single source of information one the Internet regarding these fees that isn’t a spam-laden lead generation engine. Merchants take these lumps as the cost of doing business. That’s why MCX and its associated system, CurrentC, exists. And, like most things that threaten a powerful incumbent’s rich revenue stream, it will fail.
Now MCX has taken to the Internet to offer their side of the payments story. And what a story it is.
First, a word on MCX, the so-called “Merchant Customer Exchange.” This benevolent-sounding organization is about as kind and customer-orientated as a poison dart. Aimed at killing credit card fees and ensuring dead-beat customers can never run up bills they may default on, it is essentially a system to replace cash rather than a way to streamline payments.
Here is their rundown of features:
Work on any phone – new or old, iOS or Android.
Integrate coupons, loyalty and payment into one seamless transaction.
Meet or exceed industry-standard consumer fraud protection.
Provide consumers with multiple ways to pay at their favorite merchants, including merchant gift cards, credit cards and debit accounts and personal checking accounts. MCX has plans to add additional forms of payment, including credit cards.
Empower consumers with full ownership of their decision to engage with merchants – they can choose to limit the information they share through our privacy dashboard, which means they will have the ability turn off location based services and opt out of marketing communications in our app.
Work seamlessly across multiple technologies and use cases including QR codes (which Starbucks has already proven to be successful with 6 million transactions per week), Bluetooth and many more to come.
All of these points seem fair and balanced in their own way. “Meet or exceed industry-standard consumer fraud protection” works, presumably, because cash is taken right out of your bank account by affiliated merchants ensuring that they experience less fraud and the sop thrown to credit card users means we’ll be able to connect these cards to our accounts, thereby further reducing fees through collective bargaining. In short, MCX is an attack on credit card fees.
This is great for merchants and anything that’s great for merchants is probably not great for us. While I agree that most credit card issuers are predatory and dangerous, I think the principles of credit are still a valuable financial tool. US merchants have long worked to prevent the addition of PIN and chip and other secure systems to the primitive swipe card system. After all, gift cards that store value in advance (allowing providers to raise interest on unused balances) are a cheap alternative to credit cards. That said, adding QR codes to gift cards is probably not the answer to the next stage in consumer evolution.
I am not an Apple Pay cheerleader by any stretch. To be honest, I believe a blockchain-based payments system would be far superior to anything remotely associated with Visa or MasterCard. But we don’t live in a world where BTC is perceived as a savior. We live in a world where NFC is good enough to work and just secure enough not to destroy us. While MCX is working hard to convince us of their intention to help, not harm, our payment systems, I just don’t trust anyone – not Apple, not MCX, and not the credit companies – to do the right thing (if the right thing even exists). Stay tuned for more pro-active FUD from all sides.
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