Various big retailers plan to offer users a wide choice, when it comes to paying for purchases. A gang of major retailers including Wal-Mart, Best Buy and Target, have teamed to come up with an innovative mobile payment company called Merchant Customer Exchange, which is believed to offer customers an easy way to make purchases with coupons, rebates, and loyalty programs using their smartphones.

The announcement was made Wednesday, which marked the retailers’ entry into an already crowded arena that will set a new mode to pay for everyone.

Cash or credit- this application will offer users a chance to purchase things directly from their phones, which the retailers revealed to be their ultimate goal.

A fundamental shift to mobile devices, this app is something that everyone is looking up to.

However, there have been other companies too that tried this payment system earlier. This move by the retailer seems to have been aimed at Google’s plans for mobile payments via Google Wallet. This also, to a slighter level, takes aim at Apple’s forthcoming Passbook feature, which is also designed to pull together loyalty cards, tickets, and other digital passes.

Along with Google, other competitors in mobile-payment companies include Verizon Wireless, AT&T and T-Mobile USA. There is also Visa and MasterCard, both of which have their own designs and apps. PayPal and eBay’s payment service also stands as a major competitor, which is already on cellphones.

The fact that these retailers can decide their own form of payment gives them a strong position in the arena among competitors.

As Mark Williams, president of financial services, Best Buy said, “As merchants, no one understands 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 experience more engaging, convenient and efficient.”

Mike Cook, corporate vice president and assistant treasurer, Wal-Mart, stated that this decision to use mobile app for purchases is aimed to cut down costs and make shopping a faster and convenient affair for users in this fast-paced life.

This announcement came after Square and Intuit have had success with credit card peripherals, which made a good display at malls, food trucks, and farmers markets. There are also some vendors, who have NFC-enabled registers that offer tap-to-pay or contactless payments. But this purchase-through-phones technology is believed to take off ahead of everyone.

However, there are also security issues that are making users unwilling to adopt mobile payments. It is a fact that retailers play this part along with all credit card companies, hardware manufacturers, and wireless carriers, which makes this whole technology not as smooth as it may seem.

So far, there have been around 14 retailers who plan to join the alliance later. They include 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, and Sunoco Inc.

As Target, Wal-Mart, Best Buy and their partners are strong brands; they would be able to rise above any consumer doubts. It is also assumed that a weakness in the security of any mobile payment companies can lead to the drop in the security of the entire system.