Mike Cook has been called the most powerful man in payments. As vice president and assistant treasurer for Walmart Inc., Cook is tasked with running the retailer's massive $1.2 billion payment business. This week, the most powerful man in payments basically shut the door on Google Wallet, saying that as of now, the world's largest retailer sees no reason to add another player to Walmart transactions. Cook didn't offer much consolation for Isis, NFC or Square, either.
Instead, Cook said Walmart will be putting its considerable payment muscle, at least as far mobile is concerned, behind Merchant Customer Exchange, the merchant-backed effort to create a mobile payment platform.
Cook's comments were made during a panel discussion about the state of mobile payments at the RAMP Mobile Retail Services Summit.
In the session, Cook explained that Walmart sees three types of mobile payment applications: a "slick application" that applies to a single use case, an application that layers onto the existing payment structure, and a "holistic solution" that not only provides interaction, but also solves for multiple use cases. According to Cook, Walmart is only interested in this holistic approach.
Cook was clear that MCX is the holistic solution Walmart is interested in pursuing.
"MCX is more effective," Cook said. "One of the principles of MCX is that we wouldn't just replicate the fraud prone system that's out there today." Embedding payment credentials in a secure element, the approach taken by Isis, is no better than the current payment system that costs merchants millions of dollars a year on data security compliance, Cook said.
Isis is the mobile payment joint venture between three U.S. wireless carriers — AT&T Mobility, Verizon Wireless and T-Mobile USA.
Cook also addressed the question of Walmart working with Google Wallet, Google's NFC-enabled mobile payment solution. Mike Dudas, platform lead for mobile commerce at Google, asked Cook if Walmart sees any value in working with a third-party mobile payment provider like Google Wallet. Cook said he didn't see a business case that made sense.
"Obviously Walmart is interested in partnering," Cook said. "But as of now I'm not sure there's a value-add or synergy there to make it work."
Cook added that Walmart is also not interested in sharing consumer and transaction data with additional partners. "Many of the models out there today are just adding another mouth to feed," he said.
And it wasn't just Isis and Google that Cook dismissed. Without explaining what technology MCX will be using, Cook expressed doubt about NFC as an enabling technology for payments, as well as about location-based payment methods.
"You think about the technology that's out there today, there's no private equity funding that's following NFC," Cook said. Investors don't believe — nor does Walmart believe — that it will become a payment technology in a retail environment quickly enough, he said.
"I may be wrong; we may see it, but I don't think [NFC is] becoming a technology that will handle payments," Cook said.
As for location-based mobile payments methods, Cook said they don't meet the needs of large retailers. "Geo-location isn't a solution either; it doesn't scale," Cook said, explaining that Walmart on Black Friday would overwhelm this type of payment system.