A group of retailers including Wal-Mart, Best Buy and Target are teaming up to develop and launch a mobile payment app. CNBC's Jon Fortt explains what tech firms are cashing in on this mobile wallet push.
By Juhi Arora, Reuters
Big retailers such as Wal-Mart Stores Inc, Target Corp and Japan's 7-Eleven said on Wednesday that they were developing a mobile payment network, adding to the proliferation of options to let consumers pay with smartphones.?
The system, known as Merchant Customer Exchange, is a retailer-led initiative that would match similar services from Google Inc, which began operating its own system last year on its Android devices.
The group of retailers, which accounts for about $1 trillion in annual sales, wants to make sure it has a say as standards for mobile payments are developed, said Terry Scully, Target's president of financial and retail services.
"What we are looking for is a broad, seamless experience across all retail formats," Scully said.
Mobile payments are expected to rise nearly fourfold to more than $1.3 trillion annually by 2017, a report from Juniper Research said on Wednesday.
The group is in discussions with financial institutions, technology companies and telecom providers to set up the backbone of the payment system, Scully said, but he could not predict when the system would be in stores.
"While speed to market is important, we really are focused on doing it right," Scully said.
The retailer group is joining a crowded field.
Earlier this month Starbucks Corp also took on the mobile payments model, employing Square Inc to process payments at its U.S. coffee shops.
In May, eBay Inc's PayPal unit announced deals with 15 retailers to use its system for mobile payments.
The Merchant Customer Exchange is working on offering merchants such as retailers, gas stations and restaurants a way to integrate their promotions into the payment plan, which it said would be available through virtually any smartphone.
The swift rise of mobile payment processing tools in recent years has led some observers to predict a future in which wallets are left at home. That could transform retailing, but also create security issues, particularly if mobile devices are lost or stolen.
Companies involved in MCX along with Wal-Mart, Target and Seven & I Holdings' 7-Eleven include Alon Brands, Best Buy Co Inc, CVS, Darden Restaurants Inc, HMSHost, Hy-Vee Inc, Lowe's Cos Inc, Publix Super Markets Inc, Sears Holdings Corp, Shell Oil Products US and Sunoco Inc.
The group said it planned to announce more members in the coming months.
The MCX system was reported late on Tuesday by the Wall Street Journal.
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