MCX and Ecosystems – The white flag.

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MCX serves as a lesson to all in the ecosystem.

• Merchant Customer Exchange (MCX) has paid a heavy price for ignoring the fundamentals that govern whether or not Digital Live services and ecosystems will be successful.
• MCX is an attempt by the retail industry to break Visa and Mastercard’s stranglehold on payments with a mobile-based payment system.
• In theory this makes a lot of sense as retailers operate by making wafer thin margins on huge volumes meaning that it hurts when card companies take even a small slice of the transaction.
• Unfortunately, MCX assumed that because it had the support of the biggest retailers in USA, that the user experience did not matter.
• Consequently, what emerged was a clunky, difficult to use payment system using multiple QR codes that has also proved to be somewhat insecure resulting in a couple of security breaches.
• The result has been that both its retailers and their customers have refused to adopt the system and former partners now working to ensure that their offerings are compatible with market leader Apple Pay.
• This is why MCX has “postponed” the nationwide roll out of the app, fired 30 of its staff and will now concentrate on partnering with banks.
• To heap further humiliation upon MCX, this coincides with Walmart (once its biggest backer) launching its own payment system in 600 stores across Texas and Arkansas.
• It seems that Walmart has learned something from its hapless partner as its system is much less cumbersome than MCX despite still being based on QR codes.
• However, even in this form, it has little hope of competing against Apple Pay which uses the iPhone’s NFC chip and a compatible terminal to offer a best in class user experience.
• The simplest and most important rule for any user oriented Digital Life service or ecosystem is ease and fun of use (RFM Law of Robotics No. 1).
• Smartphone users now have so many options to choose from that anything that it is not intuitive, quick to learn and easy to use will, in all likelihood, fall by the wayside no matter how good the technology is.
• Without a reasonable score on ease of use, RFM’s other 6 Laws of Robotics do not really matter as the users are likely to drop the service or ecosystem very quickly.
• This problem is most often encountered by technology companies that let the engineers who build the technology also design the user experience. .
• What the user inevitably ends up with is a bare bones offering that is unappealing to look at and painful to use.
• Sony’s user experience that runs the PlayStation 4 is a great example of this and I think that Sony is lucky that in this generation, Microsoft got it very badly wrong at launch and is still paying the price for it.
• This is why user experience design is so important in the current environment and those that ignore it are likely to fail no matter how good their innovation is.
• Apple, Google and increasingly Facebook and Microsoft have a pretty good grasp of this concept but this is something that Samsung, Sony and many other Asian companies really struggle with.
• With the exception of China, which is a law unto itself, there is no change to the current outlook where the big ecosystems of today look set to dominate the markets of tomorrow.