Home > Uncategorized > June mobile payments 5 for 5: Apple, Google, and Microsoft

June mobile payments 5 for 5: Apple, Google, and Microsoft


June 30, 2015 | by Will Hernandez

Apple and Google both made significant announcements about their respective mobile wallets in June, but Mobile Payments Today readers were more interested in reading about the possibilities Microsoft could create in payments with its pending system.

Thomas Yohannan, who focuses on the convergence of technology, law and media, wrote a blog post for Mobile Payments Today and speculated what Microsoft might do with mobile payments since we don’t know many details about the company’s plans.

Yohannan believes Microsoft is trying to become a backend payments processor.

Host Card Emulation was the flavor of the month on Mobile Payments Today as we examined the technology’s current standing.

We asked a simple question about HCE in one article: is 2015 the year the technology finally takes off? Many industry experts seem to believe that will be the case.

And of course, our readers were all over the news about Apple Pay updates, as well as what we’re going to see from Android Pay.

5. “Apple Pay gets more ‘Wallet’-like with new additions” – Apple has added private-label and loyalty card support to its mobile payment system. The company also has announced that Apple Pay will launch in the UK next month.

Apple really, really wants to replace your physical wallet, even going as far as changing Passbook’s name to Wallet during a presentation Monday at the company’s software developers’ conference.

The annual showcase also brought with it new Apple Pay features, including a firm launch date for the system’s long-awaited debut in the U.K, and news from Square about a new card reader that accepts contactless payments and EMV cards.

When Apple updates its mobile operating system to iOS 9 this fall, Apple Pay users will be able to add private-label, store-branded payment cards to Wallet, as well as loyalty cards.

BJ’s, Kohl’s and J.C. Penney are among the first retailers to announce private-label card support for Apple Pay, while consumers who frequent Dunkin’ Donuts and Walgreens will be able to add loyalty cards to Wallet from those respective merchants.

Coca-Cola, Panera Bread and Wegmans Food Markets also will bring their respective rewards programs to Apple Pay.

The new features also will be available to Apple Watch users in a software update available for download this fall.

4. “2015: The year of HCE?” – For all the talk about third-party mobile payment providers in recent weeks, financial institutions can still have a place in the conversation going forward.

A little over a year ago, Mobile Payments Today published an article with the headline “HCE should jump-start mobile payments for banks.”

Since then, however, just a handful of financial institutions in North America have integrated HCE technology into their Android-based mobile banking apps.

While Android Pay’s arrival will give banks the opportunity to integrate the system into their mobile banking apps, financial institutions run the risk of losing some brand awareness with customers.

Martin Cox, global head of sales for Bell ID, recently wrote about the FI’s dilemma in a contributed article for Mobile Payments Today.

“Android Pay offers banks more options, however, so they may well look for other routes to market in addition to the schemes,” Cox wrote.

So, what is a bank to do in this evolving mobile-payments world?

Financial institutions might learn a lesson from the Royal Bank of Canada’s current playbook.

3. “Google gets back into mobile payments with Android Pay” – The new system is similar to Apple Pay, but there are some differences in the way Google will present its mobile wallet to consumers.

Google Thursday reintroduced itself into the mobile payments market with Android Pay, a system it hinted at in March during the Mobile World Congress in Spain and a couple of weeks after the company purchased the assets of the now-defunct mobile wallet, Softcard.

While Google did not specify which, if any, Softcard features are present in Android Pay, the company’s presentation at its annual I/O developer conference in Silicon Valley had an air of familiarity to it. To steal a line from the quotable baseball legend Yogi Berra, it was déjà vu all over again.

“Android Pay arrives on the scene and in many ways it has the look and feel of its aspiring rivals, Apple Pay and Samsung Pay,” Michelle Evans, senior consumer finance analyst at Euromonitor International, told Mobile Payments Today in an email. “It will leverage NFC technology [and HCE support] and enable merchants to accept mobile payments in-store from participating consumers, as well as enable merchants to embed Android Pay directly into their mobile apps. It also will support fingerprint readers for users to authenticate payments at checkout in the same vein as Apple Pay.”

Even some of Google’s initial Android Pay retail partners are similar to what Apple announced late last year: McDonald’s, Panera, Whole Foods, and Uber are among a group of 40 retailers and service providers who are supporting both in-store and in-app payments.

Target is one of the first retailers to support fingerprint-based, in-app Android Pay purchases.

2. “Android Pay and banks” – Martin Cox, global head of sales for Bell ID, examines how the new kid on the block stacks up against Apple Pay and Samsung Pay for financial institutions.

When Google announced Android Pay at its recent I/O developers’ conference, the internet giant outlined a set of APIs that will enable developers to add an Android Pay button to their app and banks to enable payments in their existing applications, facilitating in-app and in-store payments on Android devices with KitKat 4.4 and above. This is a big deal. With 70 percent of Android handsets incorporating NFC and 50 percent supporting KitKat 4.4+, that’s a big audience.

We already know that American Express, Discover, MasterCard and Visa are on board. MasterCard has mooted its launch date to be ‘in the coming months.’ So, the global support network is in place, but broader questions remain: Will it take on Apple Pay? How will it compare, or even compete, with Samsung’s offering?

1.  “A Microsoft-sized opportunity: Payment processing” – The payments industry doesn’t know much about Microsoft’s plan for mobile payments, but Thomas Yohannan gives his take on the situation.

In March, Microsoft introduced a “tap-to-pay” feature that will be in its forthcoming Windows 10 for phones and small tablets (a.k.a. “Windows Mobile”), which would support Host Card Emulation.

Newer Android phones use HCE to transmit NFC signals to terminals, which means third-party developers can use this process to build NFC functions into their apps. Just as important, the elimination of the Secure Element makes the payment platform carrier independent, and hence carrier agnostic. These advances are sure to be greeted well in the marketplace, but what is more intriguing is where Microsoft is headed with the possible introduction of mobile payments into their ecosystem.

Based on a money transmitter license that was granted in Idaho, it appears as though the Redmond, Washington-based company is looking to go up against Android Pay, Apple Pay and the LoopPay system that helps form the base for Samsung Pay. Some may see this as a proactive approach by Microsoft to keep pace with competitors in the payments space. However, Microsoft may be trying to become a backend processor.

This move may put Microsoft in direct competition with PayPal, Square and Intuit. These companies have built the backend and have transaction engines to process payments, so they know how to send cash. However, unlike these backend processors, the advantage Microsoft would have is it would help establish potentially secure payment solutions not tied to hardware solutions. Creating a competitive product in this space would be advantageous for an enterprise software company like Microsoft.

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