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MCX Gaffes Paves the Way for ACH Based Transaction Competition

credit_cards.topWarren Buffett, one of the founding members of the three comma club, has a tried and true investment strategy: be fearful when others are greedy, and be greedy when others are fearful.

Merchant Customer Exchange (MCX) has hit a bit of a rough patch. MCX membership comprises some of the largest retailers in the country, including giants like Wal-Mart, CVS, and Best Buy. In September 2014, MCX members turned their backs to Apple Pay, an NFC-based mobile wallet system that lives among the 62 million iPhone 6’s worldwide. The reason for the snub was an internal mobile wallet project with MCX called CurrentC. Most members of MCX are operating under a signed agreement that prevents them from taking competitor mobile wallets. The agreement, however, sunsets this summer.

In a mad dash to market, CurrentC ran into a host of issues. Within the first 48 hours of beta testing, internal systems had already been hacked. Most recently this month (May 2015) it was announced that Dekkers Davidson, CEO of MCX, would be stepping down amidst internal pressures. The root concept of the CurrentC project was to allow consumers a fast and secure method to pay for goods and services by way of ACH transactions, and at the same time attempt to deal a sharp blow to credit card giants Visa, MasterCard, Discover, and American Express by cutting them out of the payment loop.

With CurrentC incomplete, and the MCX membership agreements ending this summer, some of the founding members such as Best Buy have already begun an implementation strategy for Apple Pay and other NFC-based Mobile Wallets. Best Buy has already gone live with Apple Pay via their mobile app, and retail stores will come online once NFC-ready equipment is installed system-wide.

Adoption of Apple Pay continues to grow, and it is poised for another large bounce in a few months with the introduction of iOS 9 – the latest version of Apple’s mobile operating system. The new operating system will require an iPhone 5 or newer in order to function. This means that the user base still clamoring to their iPhone 4 or 4S will need to upgrade to a newer device. The purchase wave for the next iPhone has investors salivating.

But what of the promise of ACH based transactions? Who will have success where CurrentC failed? There is a tried and tested solution on its way to North America, and it is called SEQR. Similar to the model of CurrentC, SEQR will be an app living on your smart device (iOS and Android apps are slated for US release in mid June). The app will allow you to directly link your bank account and secure it by a 4 digit pin. Payments are then paired using a single-use QR code to initiate and complete the purchase. The distinct advantage SEQR has over CurrentC is a ten year track record of successful implementation in Europe, with high visibility merchants such as McDonalds. Now, it makes the voyage stateside to offer flat-rate ACH based transactions that are entirely independent of Credit Card Interchange tables. It gives the merchant a great way to augment their payment processing strategy, and saves money for both the merchant and consumer.

How do merchants get signed up? Newtek Merchant Solutions is excited to announce we are the first North American partner with SEQR, with beta programs already underway. For merchants interested in signing up with SEQR, or if there are any questions, contact the Sales Team at Newtek Merchant Solutions directly at 1-800-277-6990, or email at eppsales@newtekone.com.

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