Major Retailers Plan Mobile Payments Effort


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Cash, credit or debit? You may one day have far more choices to make at the checkout counter. A group of big retailers, including 7-Eleven, Best Buy, CVS and Wal-Mart, said on Wednesday that they were forming a company that would offer a way for customers to pay for purchases with their smartphones, joining a wide array of groups and companies seeking a piece of this market.

Other than announcing the formation of the payments network, to be called Merchant Customer Exchange, the companies released few details about how their mobile payments would work, and did not say when the technology would become available. They said that their payment application should be available for virtually any smartphone, and that it will use a secure technology to process transactions.

Fourteen companies so far have said they are on board to help develop the mobile wallet system, and more are expected to join the alliance later.

“We believe that merchants are in the best positions to deliver mobile payments to billions of people,” said Mike Cook, vice president and assistant treasurer of Wal-Mart. He said that the merchants in the group, which take in $1 trillion in annual sales, know people’s shopping habits and payment preferences, so it made sense for them to work together on this.

The announcement came a week after Starbucks said it was teaming up with Square, a start-up company that lets people make purchases with a smartphone. Howard Schultz, the chief executive of Starbucks, joined Square’s board of directors. Some speculated that this partnership risked alienating other big retailers like 7-Eleven, because it would give Starbucks influence over how Square’s payment system was developed.

In addition to Square and similar start-ups, many different types of businesses are hoping to make a grab at the mobile wallet market, including phone carriers, credit-card companies and big tech companies like Google and Microsoft.

While competition in a market is typically a good thing, giving consumers many different options to make a mobile payment could leave them baffled. Charles Golvin, a Forrester analyst who focuses on mobile technology, said he believed that in order for a mobile wallet product to gain traction, it will need to be an open system that allows customers to pay for anything, anywhere they are.

“You need to remove this possibility of the customer scratching their head as they walk in and saying, ‘Gee, I wonder if I’ll be able to pay here with X, Y or Z?’” he said. “That consideration, if it’s present, is a buzzkill.”

Mr. Golvin said that the newly announced merchants’ payment network seemed like it could gain some traction with customers who shop regularly at the businesses that make up the group. But he said it didn’t seem likely to generate a compelling product that would give the idea of mobile payments the push it needs. “It does not strike me as a driver for the fundamental shift to mobile payments that the industry at large is counting on,” he said.



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