More than a dozen big merchants are expected to announce Wednesday their plans to jointly develop a mobile-payments network that would compete with similar services from Google Inc. and other companies, The Wall Street Journal reported.
Wal-Mart Stores Inc., Target Corp., 7-Eleven Inc. and Sunoco Inc. are among the companies hoping to elbow their way into the burgeoning market that turns smartphones into devices for making purchases. Iowa-based grocery chain Hy-Vee Inc. is one of the participants in the initiative.
The initiative, called Merchant Customer Exchange, or MCX, is at an early stage, and the companies haven't set a launch date or hired a chief executive. A CEO search is under way. It isn't clear how much money each participating merchant is contributing to the network's development.
Though few shoppers use their phones as mobile-payment devices, industry executives are convinced that consumers eventually will be just as comfortable buying with their phones as they now are when using credit and debit cards.
The technology relies on applications that a customer can download onto a smartphone and then make purchases in a store by tapping the phone against a reader placed by the cash register.
Mobile-payment transactions are expected to surge to an estimated $600 billion worldwide by 2016, up from $172 billion this year, according to market-research firm Gartner Inc. A Federal Reserve report in March said 87 percent of Americans have a mobile phone; nearly half of those are smartphones.