Best Buy and Target are banding with a dozen other major retail players to form a new mobile payment platform that will give shoppers the ability to buy goods across the network using their smartphones.
The venture is known as the Merchant Customer Exchange, or MCX, and also includes such companies as Wal-Mart, 7-Eleven, CVS, Lowe's, Sears Holdings, Publix Super Markets, Shell Oil and Sunoco.
Combined, the companies ring in about $1 trillion in annual sales, according to an announcement about the project on Wednesday.
Backers say the mobile technology will give consumers a faster and more convenient shopping experience. Consumers would download an app to their smartphones that would let them hold it up to a cash register.
While most consumers don't yet use their phones to make payments, competition to create such "digital wallets" is fierce.
Mobile payments are expected to be about $172 billion this year, according to Gartner Inc. But in five years, that number is expected to skyrocket to $1.3 trillion a year, according to Juniper Research.
"We've joined this one-of-a-kind effort in recognition of the significant potential we see in mobile payments and our desire to achieve a robust and cost-efficient solution," Target CEO Gregg Steinhafel said in a morning call with analysts. "This effort in the mobile space presents a balanced market-driven approach to the future of payments."
The retailers' initiative would compete with Google Wallet, which launched last year for the company's Android devices, as well as Square, which announced a partnership last week with Starbucks. About 15 retailers also have signed up with eBay's PayPal to allow mobile payments.
"I think it is a game changer, if they're successful," said Rick Ogelsby, a financial services analyst with the Boston-based market research firm Aite Group.
The effort by so many mass retailers could accelerate the acceptance of mobile payments, he said, and give retailers an advantage over competitors if they can come up with a simpler solution.
"As a consumer, you don't want to download a separate app for every merchant where you shop," he said. "You're much more likely to be happy with one app you can use for every merchant."
In a recent report from Forrester Research, analyst Denee Carrington predicted that digital wallets will transform the payments ecosystem.
"They are the subject of much discussion in 2012, as product strategists from startups, mobile operators, financial juggernauts, and giant retailers race to test the waters," she wrote.
Work on the network "is underway," according to the announcement, but it's unclear how soon it will become available and how much each company is kicking in.
The group is aligned with a variety of retailers as well as restaurants and gas stations. More companies will be announced in the coming months, according to the group.
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