NEEDHAM, Mass. -- In a conference call with reporters, Merchant Customer Exchange (MCX) CEO Dekkers Davidson defended the company's CurrentC mobile wallet exclusivity requirement that prohibits retailer members from accepting competing forms of payment including Apple Pay and Google Wallet.
The retailer consortium attracted media attention this month after some retailer turned off their Apple Pay acceptance technology. MCX retailers CVS and Rite Aid, which have the near-field communication (NFC) readers that support Apple Pay, have taken measures to disable or alter the readers so that consumers cannot use the service or Google Wallet.
Davidson would only say, "Merchants make their own choices about their commitment to MCX. And they can make their own choice about other forms of payment. MCX has been built by merchants who have invested time and money and effort to create a fabulous consumer experience. They and we have been very thoughtful in developing use cases that will work at the point of retail."
He said MCX is "agnostic about technology. … We started with a cloud-based, QR code-based technology because it allows us to go to market broadly across almost all devices, and if we need to, we can pivot to NFC technology at the appropriate point in time."
Asked whether a retailer that joins MCX can keep accepting Apple Pay or Google Wallet, Davidson responded, "The merchants have made a choice here based on the consumer experience they want to have, regardless of what kind of technology they have at the point of sale. So this is not a technology decision--this is about consumer engagement."
MCX--which said it will launch publicly in "early 2015"--also offered details on an attack that compromised emails but obtained no financial data.
"We had an unauthorized disclosure of emails," Dekkers Davidson, CEO of Needham, Mass.-based MCX, told reporters on the call. "Our email provider informed us that their system was hacked, exposing some tester email addresses, many of which were dummy accounts. The CurrentC app itself was not affected. … We own this, and we're taking this seriously and we're addressing it with our partners."
He explained that "consumer information and payment credentials are not stored on a device, they are not actually present in the physical world. They are stored in a secure server in the cloud that was designed and anticipated serial, regular attacks."
Davidson would not speculate on the hacker's motives, but said, "MCX and the merchants that founded MCX are challenging the status quo--an entrenched, very large status quo, a $500 billion ecosystem on the payments side--and so when you poke at a large ecosystem like that, you should expect, and we have expected attacks. There have been many; there will be more to come. None of this comes as a surprise."
He continued, "We can't speculate about the motivations of the people who did that. It's unfortunate in this digital age that some people think it's cool to hack and steal information."
He said that the incident will not affect the scheduled rollout of CurrentC "at all," adding that "one of the reasons we have launched the way we've launched is to test our systems in a safe environment with employees. We expected attacks. There have been many attacks, and we will deal with them."
Major retailers behind MCX include Walmart, Sam's Club, Best Buy, Target, CVS, Rite Aid Meijer, Michael's and Wendy's, among many others. In the convenience store and gas station channel, MCX merchants include 76, 7-Eleven, Alon, Circle K, Conoco, ExxonMobil, GetGo, Kum & Go, My Goods Market, Phillips 66, QuikTrip, RaceTrac, Sheetz, Shell, Sunoco and Wawa. Collectively, MCX companies operate more than 110,000 locations and process more than $1 trillion in payments annually.
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