Marc Batchan

Submitted

MCX and CurrentC: How to Become the Laughingstock of the Mobile Payments Industry
Marc Batchan
Last modified on December 9, 2015 at 7:52 pm
Conceived in 2012 to save retailers $15 billion in annual payment card processing fees, CurrentC is still not widely available, largely due to a disconnect between MCX's business and operating models.

Activity Feed

On December 14, 2015, Marc Batchan commented on MCX and CurrentC: How to Become the Laughingstock of the Mobile Payments Industry :

Great comment Megan – it really all does come down to price. If AAPL is willing to take less of a cut on Apple Pay, or if V/MA/AXP are willing to charge lower processing/brand fees, or if card-issuing banks are willing to take less interchange revenue, then there is no conflict and Apple Pay would likely be rolled out at MCX/CurrentC merchants without resistance.

Bringing so many powerful retailers together is an enormous accomplishment, and one that, behind closed doors, has likely not truly been acheived. Funnily and ironically, the day after I submitted this post, Walmart decided to break away from the rest of the MCX/CurrentC merchants and announce Walmart Pay (yes, seriously: http://news.walmart.com/news-archive/2015/12/10/walmart-introduces-walmart-pay). Just shows us that herding cats (especially when the cats are named Walmart, Target, CVS, and Lowe’s) is almost impossible.

On December 13, 2015, Marc Batchan commented on Emirates, connecting the world. :

Awesome man, thanks for clearing that up. For some reason I assumed that Emirates was also focusing on the high end, but that might be because I’ve been fortunate enough to only fly with them for business! Excellent comparison.

On December 13, 2015, Marc Batchan commented on Whole Foods: Creating An Organic Experience :

Good write-up, Vicky!

I’m curious about how you think some of the recent controversies will impact public perception of the Whole Foods business/operating models. For example, the overcharging situation (http://money.cnn.com/2015/07/02/news/companies/whole-foods-overcharge-apology/) probably doesn’t inspire thoughts of community-centric culture, and organic farmers being unhappy with the food rating system (http://www.npr.org/sections/thesalt/2015/06/12/411779324/organic-farmers-call-foul-on-whole-foods-produce-rating-system) might call into question Whole Foods’ high quality values.

On December 13, 2015, Marc Batchan commented on Uber – Reinventing The Taxi Station Operating Model :

Nice write-up, Yael!

I’ve heard quite a few people suggest that the only reason Uber is able to recruit drivers is because it is too difficult for drivers to understand that they are essentially making below minimum wage (due to gas, maintenance costs, insurance, self-employment taxes, etc.). Do you think that Uber may have potentially swung the two-sided market pendulum too far in favor of riders in effort to maintain share/open new markets? If I were an Uber investor, I’d be concerned about drivers eventually realizing that they are being taken advantage of.

I’ve found unofficial Uber drivers’ forums particularly interesting to read while thinking about this topic. Here’s one example: http://uberpeople.net

On December 13, 2015, Marc Batchan commented on Standard Oil – A Company So Effective, Only the U.S. Government Could Compete with it :

Nice write-up, Schultz. Thought the breakup graphic at the end was cool – explained what all those Esso (Ess… O… Standard Oil) stations that we saw in Montreal a few weeks ago were.

On December 13, 2015, Marc Batchan commented on Emirates, connecting the world. :

Tariro, I’m curious about how you would compare the operating models of Emirates and Etihad.

They’re pretty much identical in terms of location, government support, clientele, and hard product, but I’m aware of one big difference: Etihad tends to make equity investments in other airlines with which it partners (http://www.etihad.com/en-us/about-us/our-equity-partners/), while Emirates does not. Do you think this type of approach might better position Etihad in the creation of a global route network?

On December 9, 2015, Marc Batchan commented on Missed Opportunities at Coin :

Cool analysis!

Just wanted to add in that, fundamentally, Coin cannot be EMV compatible. Coin works for (some) mag stripe transactions because it is effectively creating a counterfeit card by copying mag stripe track data from a card to Coin’s mag stripe. EMV was introduced to prevent counterfeit card fraud (EMV + Pin incrementally prevents lost/stolen fraud). EMV works by replacing a static CVV1 data element that is embedded in the mag-stripe track data with a dynamic dCVV data element that is generated by a microchip. Coin can, in theory, copy a dCVV from an EMV card, but it would be a point-in-time copy and would not actually work when used for a transaction. Coin does not have access to the algorithms used to generate a valid dCVV for a particular point in time, and so far, banks and payment networks have not been willing to share that information.

On December 9, 2015, Marc Batchan commented on MasterCard: The Cashless Champion in the Global Payments Industry :

Nice one, Sijh!

Had a question for you about point number 2 in your conclusion. Although MasterCard’s operating margin is great by any measure, it does lag Visa’s considerably. Working at Visa, we always interpreted the cause of this as a combination of:

1) MasterCard “buying” market share by offering clients more incentive dollars than Visa was willing to offer, and;
2) MasterCard being a more willing partner to enable projects that cut margins but may help gain share (such as partnerships for localizing domestic processing).

Gaining share is clearly key for MasterCard, since they are the smaller player in many regions, but do you think that this type of strategy is viable in the long term, or do you think it will poison the pool and lead to reduced margins for both players as Visa is forced to respond?