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Comment by coleca | Hacker News Reader

I'm in awe that some sales person was able to sell Walmart, Target, BestBuy, CVS and all these other stingy retailers on a payment system like CurrentC/MCX. Any B2B enterprise focused startup would be wise to find and poach these guys.

That aside, I have no sympathy for MCX's demise. These guys started out trying to charge $30k just to view their PowerPoint deck. $1m to join the consortium and get a board seat. This may seem like pennies to these billion dollar valuation startups, but retailers are a different breed not willing to spend a dime on anything that hasn't been proven.

At my last retail job I was was pitched by these guys (without the PPT fee) and had a hard time keeping a straight face when they said they wanted the consumers to give up their bank account info right after the Target breach, but somehow they found a whole bunch of backers.

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> I'm in awe that some sales person was able to sell Walmart, Target, BestBuy, CVS and all these other stingy retailers on a payment system like CurrentC/MCX.

It's not as hard as you'd think. I previously worked for a start up that sold Walmart on a POS system that was absolutely terrible (the codebase didn't even have any tests). The big retailers like Walmart have a sort of "throw money at everything and see what sticks" approach to technology. They regularly sign contracts to try out new tech but only in one or two stores. If it works well, they scale up to more stores, but that almost never happens.

This seems like a completely reasonable approach. New IT at scale is often more of a risk than a benefit for companies like Walmart.

A little back-of-the-envelope math:

Wal-Mart: $482B in revenue (2016, projected), if they're paying ~3% on average for interchange/credit card fees, that's $14.5B they could have saved last year.

Target: $74B, $2.2B they could saved.

CVS: $153B revenue (2016, projected), $4.6B in savings.

That's a pretty easy sell. Those are tremendous amounts of money they're "spending" that they'd love to ditch. Granted they get a lot for that (credit card companies take on a lot of risk), but if they could shave those numbers down, that's a lot of pure profit they could get.

It's gotta be a lot less than that. Most of Walmart's customers are probably using cash/debit/EBT since they cater to a population that is more price sensitive and less likely to use credit cards.

For someone presumably involved here, you seem pretty misinformed...

>> Walmart, Target, BestBuy, CVS and all these other stingy retailers

^^ These retailers ARE who came up with the idea. They are the ones who evaluated how much and for how long it would be worth it to invest in MCX, and they are all part owners of MCX, so are well aware of any decisions being made. Until MCX files for bankruptcy, it is safe to say that they still believe the cost is worth the potential payout.

> but somehow they found a whole bunch of backers.

Well no, they wanted something like CurrentC because it would give them access to so much consumer data.

I wonder how much of that was Walmart driving it. It'd be a pretty easy ask given that most of these companies have a hatred for the 2-3% credit card fees they give up.

Yes, MCX probably took advantage of the retailers' deep hatred of the swipe fees they pay to the banks.

We had a similar concern about MCX's competitor ISIS (name later changed to Softcard for obvious reasons) because our finance team feared that it might shift too high of a percentage from Debit transactions to Credit which cost a slightly higher percentage.

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