Big Retailers Joining New Payments NetworkBig Retailers Joining New Payments Network

The Wall Street Journal reported Wednesday that several large retail companies are joining a new electronic payments network to compete with similar services from Google and others.

The NFC Forum's N-Mark logo for NFC-enabled devices. The new system is part of a broad anticipation in the industry that customers will adopt smartphones enabled with NFC, or Near Field Communications, for retail payments. NFC use is in its infancy and other forms of electronic communication are more common, but investments in NFC systems are large and growing.

With NFC, users need only hold the phone in close proximity to a reader at the point of sale. The common instruction is to "tap" the phone to the reader, but the tap is technically irrelevant and done only to get the NFC antenna in the smartphone within a few centimeters of the reader.

The article cites a report from Gartner Inc. saying that "[m]obile-payment transactions are expected to surge to an estimated $600 billion world-wide by 2016, up from $172 billion this year."

The merchants named in the article are 7-11, Wal-Mart, Target, and Sunoco. The four are joining a new consortium called Merchant Customer Exchange, or MCX, a payments network still being formed. A CEO search is underway and a launch date has not been set.

MCX is planned to compete with other networks being formed in the business. Starbucks recently announced an alliance with Square for electronic payments. Google Wallet, another potential competitor, recently announced support from all major credit cards.