The CurrentC Shutdown and What It Means For You
As of June 28, 2016, CurrentC, the mobile payment app created by the Merchant Customer Exchange, has officially shut down. The move follows an announcement in May that MCX was laying off 30 employees and refocusing its efforts on partnerships with financial partners like Chase.
CurrentC was initially rolled out in a beta pilot program in Columbus, Ohio on September 15, 2015. A nationwide rollout was planned for 2016 but was canceled as the organization looks at other growth methods.
Merchants who accepted CurrentC as a form of payment will need to inform customers that the payment option is no longer available. Other forms of mobile payments are still available, and CurrentC as a technology will still live on through its financial partnerships.
- What is CurrentC?
- Problems with CurrentC
- How Do You Process Refunds?
- What Alternatives Are There?
- What's Next for MCX?
What is CurrentC?
CurrentC was originally announced in 2014 as a competitor for mobile payment solutions like Apple Pay, Samsung Pay, and Google Wallet. Mobile payments are expected to grow in popularity in the coming years, and CurrentC was intended to be part of it.
The app was developed by the MCX, which is a consortium of over 40 big box retailers that include Walmart, Target, Best Buy, Dunkin Donuts, Gap, CVS, 7-Eleven, and Rite Aid. The MCX was formed in 2012 by major retailers to unionize against credit/debit card issuers like Visa and MasterCard after a series of lawsuits kicked off after an unacceptable class-action settlement in 2003.
When mobile payment solutions began emerging, these large retailers saw an opportunity to capitalize on the technology to bypass credit card interchange fees instituted by card issuers. Rather than pay with a credit card, customers had the option to transfer balances to the CurrentC app (or link their checking account) to pay by phone using QR codes or ACH payments.
Since it allowed ACH, store credit card, and gift card payments, CurrentC stuck out in a crowded field of mobile payment solutions. These payment options were the ones that allowed retailers to bypass transaction fees. By the time it was shuttered, CurrentC had dozens of retailers lined up to accept the payment service in hopes of lowering credit card processing fees.
Problems with CurrentC
Although created with good intentions, CurrentC was plagued with controversies the moment it was announced. Initially retailers who joined the MCX were required to refuse other mobile payment options and exclusively support the app. This decision led to murmurs of a class-action antitrust lawsuit against the retailers involved. Throughout 2015, these major retailers slowly gave in and began accepting other mobile solutions.
Initial reviews of the payment app were notoriously bad from both the media and consumers. The app only had a one-star rating in mobile app stores. Major tech blogs also viewed it negatively, and Time declared that the technology behind CurrentC was clunky, difficult to use, and designed with retailers in mind instead of consumers (which it was). While the rest of the industry focused on NFC- and MST-based payments, QR codes were seen as archaic and outdated technology.
To make matters even worse, CurrentC was hacked in October 2014, months before its launch, compromising the email addresses of anyone who signed up to be a part of the program. This security vulnerability didn't help the popularity of the app.
In March 2015, PayPal announced it purchased Paydiant, the mobile wallet startup whose technology powered MCX. This move made it unclear how the service would continue.
By the end of 2015, Walmart, the so-called leader of the consortium, announced it was launching its own mobile payment solution. While many consumers saw this as competition for Apple Pay, industry insiders know it was a major shot fired at CurrentC. In 2016, CVS launched its own mobile wallet app, CVS Pay; another nail in the CurrentC coffin.
How Do You Process Refunds?
If you participated in the pilot program, there's a possibility you may need to process refunds or returns for merchandise purchased using the CurrentC app during its short run. These refunds can be processed as normal, and the MCX can still credit the refunds to customers.
There's more customer-focused information about accounts located on the CurrentC website, so be sure to refer customers there to answer any questions.
What Alternatives Are There?
Many of us were excited to see how CurrentC would pan out, as it would've meant much less money spent on credit card transaction fees. CardFellow was founded on this exact premise, although we go about it in a much different way. We help you find credit card processors with the best terms for your specific business needs. Feel free to sign up for a free account and browse our directory of credit card processors to get free quotes or let us know if you have any specific questions.
Despite CurrentC no longer being offered, mobile payments are still expected to rise. You'll need to be aware of the various services offered in order to provide options to your customers.
Samsung Pay, Apple Pay, and Android Pay (formerly Google Wallet) are the major players in this space. Accepting payments from Apple and Android Pay only requires you to have an NFC-enabled POS system. While Samsung Pay utilizes NFC payments, it also uses MST technology, which allows phone payments on machines where cards are swiped (although not card-fed machines).
In addition to these applications, banks like Chase, Citibank, Bank of America, and Wells Fargo are also developing their own mobile payment apps (or adding the functionality to existing apps).
Individual stores have also been introducing their own apps. Walmart Pay and the Starbucks app are examples of these store-specific cards. These apps often go beyond payments, allowing customers to shop, order, and pay, while offering rewards, coupons, savings, and other incentives.
If it's within your means, you can consider creating a similar app specific to your store. These apps can cost anywhere from $50,000 to $1,000,000 to create. Not only can it assist in lowering card processing fees, it improves customer loyalty and provides a useful avenue of communication. Many of the POS platforms available allow connectivity to mobile apps and other ecommerce platforms.
What's Next for MCX?
Although the CurrentC app is on the back-burner, the MCX consortium is remaining in place. The organization's partnership with JP Morgan Chase will integrate its functionality into the app and they're pursuing partnerships with more financial institutions.
The organization hasn't fully abandoned the app, but it has been removed from the mobile app stores. You can still request membership with the MCX, though it's unclear at this time what benefits would come with membership.
While CurrentC is considered a failure at this point, its goal of lowering card interchange fees is still valid. The settlement between Visa/MasterCard and business owners is still being heard in appellate court and the retailers involved (which also include Amazon) are taking a hardline stance against card processing fees.
You do need to be aware of mobile payment options, but in the meantime, keep an eye on your fee structure and don't be afraid to price shop other solutions. CardFellow maintains working relationships with all major card processors and actively assists you in securing the lowest fees possible. Use our quote comparison tool today to see how much you can save by switching processors.
Brian Penny is a former Business Analyst and Operations Manager at Bank of America turned freelance writer focused on business and technology. His work appears in Huffington Post, Fast Company, and The Street.