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Meet Paydiant, the startup behind the CurrentC mobile wallet

CurrentC is a mobile wallet backed by some of the nation's largest retailers. The app, which lets customers save and earn loyalty rewards, has been attracting a lot of attention recently -- mostly because it is competition for Apple Pay. One crucial component of the CurrentC app, however, has not gotten much attention -- Paydiant, a four-year-old startup with 75 employees that provides the underlying mobile payments platform technology for the CurrentC app.

The fledgling company has partnered with Merchant Customer Exchange, a merchant consortium formed by many of the biggest brands in the U.S., including Target, Walmart and Best Buy, to create the mobile pay app. Though not yet available to the general public, the app is being tested on a select group of consumers. Security, of course, is a big issue.

Chris Gardner, Paydiant co-founder and head of products and marketing, said that the Paydiant technology tackles it head-on.

"The only way that data gets handled and manipulated is directly over a private line from our cloud to the retailer or to payment processors," he said. "So, it never kind of comes down through the phone and through the point of sale. And so, getting all that private information out of the transaction flow, which is how it works today, is absolutely paramount to providing a secure platform."

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The CurrentC pilot program hit a bump in the road in late October. According to the MCX website: "We learned that unauthorized third parties obtained the e-mail addresses of some of our CurrentC pilot program participants and individuals who had expressed interest in the app. Many of these email addresses are dummy accounts used for testing purposes only. The CurrentC app itself was not affected."

A spokesperson for Paydiant said the company informed customers that it had found "no evidence that Paydiant's systems were compromised and there was no impact for our customers." 

Avivah Litan, an analyst with Gartner who focuses on the security aspects of payment systems, among other things, doesn't think the breach is a big deal for CurrentC.

"The fact that it was breached is bad news, but it wasn't really in full production, you know. So, you've got to give them some slack. Everyone can be breached," she said, noting that Apple has had its own security issues. "Apple was breached too -- their cloud services, not their Apple Pay systems."

CurrentC's approach has also attracted some negative press regarding its focus on retailer needs, rather than on the consumer. Paydiant's Gardner, for one, discounts the critique, pointing out that retailers have the right to own the customer relationship, including the payment method.

"I think what you see in kind of the tension between CurrentC and Apple Pay and all that stuff is the retailer saying, 'Hey, you know what? We don't particularly want a new middleman in that interaction or at the very least we want the option to preserve that customer relationship for ourselves,'" Gardner said.

"Mobile's a marketing platform; it's a very powerful way to interact with your consumers and it's not just about payment," he said.

Let us know what you think about the story; email Kristen Lee, features writer, or find her on Twitter @Kristen_Lee_34.

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Which do you think is the safer mobile wallet approach?
That's an interesting approaching to securing transactions. Maybe it has some uses in other areas?