Target, Wal-Mart, Best Buy leap on board phone payments Now You Can pay by Mobile

A bevy of big-name retailers including Wal-Mart Stores Inc., Best-Buy Co. and Target Corp., are teaming up to create a company that will give U.S. customers some other way to make purchases: with their mobile phone.

The businesses said Wednesday that the new company, Merchant Customer Substitute, is formulating a mobile application that will be available for nearly any smart phone. The app is anticipated to integrate a variety of coupons, rebates and loyalty programs.

With the proclamation, retailers are entering an already crowded arena where different industry groups are jockeying for position on the smartphone screen, which everyone anticipates will be the new way to pay.

Among the competitors is Internet giant Google Inc., which already has a smart phone payment app in use on some Sprint phones. Three of the largest cell phone companies — Verizon Wireless, AT&T and T-Mobile USA — have a competing platform. Payment networks Visa and MasterCard each have their own intentions and apps. Square, a startup, recently struck a deal to become the cell phone payments processor for Starbucks. PayPal, eBay's payment service, is on cell phones, too.

Retailers have a firm position in the arena, since they can decide which forms of payment to accept.

"As merchants, no one realizes our customers' shopping and payment experience better than we do, and we're confident that together we can develop a technology solution that makes that go through more engaging, convenient and effective," Mark Williams, president of financial services for Best Buy, said.

Mike Cook, collective vice president and assistant treasurer for Wal-Mart, said in a statement that using a mobile app will help to cut down costs and build shopping faster and more convenient.

Other retailers included in Merchant Customer Exchange are 7-Eleven, Inc., Alon Brands,CVS/pharmacy, Darden Restaurants Inc., HMSHost, Hy-Vee Inc., Lowe's Cos., Publix Super Markets Inc., Sears Holdings Corp., Shell Oil Products US, plus Sunoco Inc.

The letter retailers that are part of the new company account for about $1 trillion in annual sales. More retailers are expected to be announced as new members in the approach months, the group said.