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Google Gets Strong Challenger as Target, Wal-Mart, and Other Retail Giants Join the Mobile Wallet Fray


Several large national retailers have joined forces to start a new mobile payments network called Merchant Customer Exchange.

MINYANVILLE ORIGINAL Google has a new challenger in the mobile payments space. Some of the nation's largest retailers, including Target (TGT), Wal-Mart (WMT), Best Buy (BBY), and Sears (SHLD), are banding together to develop a mobile payment network that will allow consumers to pay for goods at participating stores with their smartphones.

The system, called Merchant Customer Exchange, or MCX, is of course similar to the Google Wallet, which the tech giant launched in partnership with Citigroup (C), MasterCard (MA) and Sprint (S), among others. Verizon (VZ), AT&T (T), T-Mobile, JPMorgan (JPM), Capital One (COF), and Barclays (BCS) also have their own mobile wallet system, Isis, which was created in 2011.

The group of retailers believes that with their scale, MCX will become the new standard in the mobile wallet market. Together, these retailers account for some $1 trillion in annual sales.

"What we are looking for is a broad, seamless experience across all retail formats," said Terry Scully, Target's president of financial and retail services, in a statement. "We believe MCX is uniquely qualified to offer the most comprehensive mobile payment options for consumers."

Other companies that will accept the new MCX app include CVS (CVS), Lowe's (LOW), Shell (RDS-A), Sunoco (SUN), Alon (ALJ), Darden Restaurants (DRI), Japan's 7-Eleven, HMSHost, Hy-Vee, and Publix.

The mobile payments market is expected to grow almost 400% to over $1.3 trillion per year, according to a new report from Juniper Research, which explains why so many companies have been eager to stake out a position in the space.

Just a few weeks ago, Starbucks (SBUX) announced that it will be partnering with tech rising star Square to allow caffeine lovers to pay for their fix via the latter's mobile app. eBay's (EBAY) PayPal also announced its own mobile wallet system in May, with 15 retailers signed on.

With the big customer base MCX possesses, the system has as good a chance as any of setting the standard that everyone else will have to adopt. For now, however, competition is cut-throat. Verizon, for example, which is part of the Isis network, blocks the Google Wallet app on its smartphones.

The MCX consortium also said that it will announce more members in the months to come.

Twitter: @sterlingwong
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