It’s a mobile world and the smartphone has become the interface in our interactions with the rest of the world.
The initiative by a group of retailers is recognition of this fact. A group of retailers led by Wal-Mart Stores, Inc.(NYSE:WMT), Target Corporation (NYSE:TGT) and Japan's 7-Eleven is developing a mobile payment network that will allow customers to pay using their smartphones.
Google was the first company to flag off its initiative in this direction last year when it launched its own payment service on its Android operating system for smartphones.
In August coffee chain operator Starbucks followed up with its own mobile payments model in alliance with Square Inc. to process payments at its U.S. coffee shops. In May auction site eBay Inc(NASDAQ:EBAY) along with PayPal had announced deals with 15 retailers to use their own system for mobile payments.
Get Free Trend Analysis on The Retail Sector Here
The global retailers, who between them account for about $1 trillion in annual sales, want to set a benchmark in the formulation of uniform mobile payment standards.
"What we are looking for is a broad, seamless experience across all retail formats," Target’s President of financial and retail services Terry Scully said.
Mobile payments are expected to rise nearly four-fold to more than $1.3 trillion annually by 2017, a report from Juniper Research said on Wednesday.
The group has initiated discussions with financial institutions, banks, and technology companies and telecommunications providers to develop and set up a backbone network for the payments system.
However the larger retailers are not happy with the current systems now available in the market, all of which are independent of each other. The intention is to introduce a uniform payments system with common standards that can be used by everyone and will be compatible across platforms.
The venture has been named Merchant Customer Exchange and is working on offering retailers, gas stations and restaurants a way to integrate their promotions into the payments plan that could be available on any smartphone.
The group has however not set any deadline for the launch of their payments system.