Payment Jungle: Today’s payment industry can be compared with either payment war, payment jungle, or even just payment storm. This article is focused on high-level discussion and showing what is happening in the payment industry and the contribution and future impact of four well-known camps: Apple, Android, Microsoft, and Samsung. This article can help, but only with a high-level understanding. Readers who are interested in knowing some more details on each one of them are suggested to read them separately to get complete insight. This post was originally published on 06-June-2015 on Linkedin.

Payment Jungle – Outlook

Experts in any form of payment, like mobile, Internet, paper, or card, should not be disappointed after reading this, as it is not meant for detailed or deeper understanding. In case you need detailed information or deliberation on any part, please feel free to get in touch directly with me. Mobile financial services are my industry. Charmaine Oak, a SME in the digital payment industry, wrote a very informative, excellent, detailed, and dedicated article on Android Pay at Digital Money.

jpIf we had any global ministry of innovation for regulation and control, then for sure, till date, cash will be the single king, but since it’s not, mobile payments have proven themselves as economic freedom. In the current payment race/war where everyone is running to get their share of this hot cake, we are now getting the new arrival Android Pay, announced by Google at its I/O conference.

Android Pay would be available through a set of APIs that will allow developers to add an Android Pay button to their app and banks to enable payments in their applications on Android devices with KitKat 4.4 and above. Just imagine how powerful this central payment hub would be for consumers as the payment cake size continues to increase and upgrade with new ecosystems, applications, and devices coming to market.

In the United States, banks and card companies are putting in continuous and vigorous efforts. A smart approach to achieving the acceptance of mobile phone or smart card NFC payments and EMV-compliant cards is to encourage merchants to switch from older magnetic stripe payment terminals, but the entire process of transitioning may take several years. Make sure to focus on the letter “S” that comes after the word “years” in the final sentence. Anticipating updates or cues on the progress and implementation of the NFC revolution via MIFARE4Mobile®, which serves as a guiding platform for the advancement of MIFARE4Mobile technology. The Industry Group is composed of distinguished participants in the Near Field Communication (NFC) ecosystem, encompassing several recognized entities.

 Mobile Payments – Another Form of Payment Jungle

The payment landscape is becoming increasingly intricate with the advancement of the mobile payment ecosystem and the potential introduction of new participants and technologies. Remaining up-to-date with the latest advancements, weighing the advantages and disadvantages of various mobile payment alternatives, and picking the most suitable alternative to satisfy one’s needs and inclinations are crucial for users.

Recently, I received an inquiry via email regarding the window size for mobile payments and IoT-based mobile payments. Being curious, I conducted some research and drew from industry experience, as well as my study and reading, to provide insights on this topic. In this piece, I will exclusively focus on the four primary players in the mobile payments market: Apple, Microsoft, Samsung, and Android Pay.

AP_bklTo utilize Apple Pay, individuals must adhere to Apple’s approach, in contrast to users of Android-operated devices, who have access to numerous options and methods, with a market share on a worldwide level ranging from 75 to 80 percent and featuring a vast array of alternatives.

When Apple Pay was introduced towards the end of 2014, it sold 10 million units in just 3 days, indicating high demand (although it’s unclear how many were produced for the initial launch). However, from a technological standpoint, Apple Pay’s NFC solution wasn’t revolutionary or unique.

Undoubtedly, this introduction aimed to establish a precedent for NBFTC (non-banking financial and technology companies) on how to penetrate the payments and banking sectors and capture a portion of the market. While many mobile network operators focus on expanding their reach in remote and isolated areas, the successful growth of mobile networks has enabled millions of people to connect via their phones. Mobile money has emerged as a feasible substitute for conventional bank accounts due to this development. The connection between the prominent banks and Apple concerning mobile payments can be described as extremely sensitive.

Apple is trying to enable NFC-based mobile payments to cross the chasm. Apple’s move has the potential to vastly increase mobile payment revenue, which would create a potentially highly lucrative market for banks. But the precise details of early negotiations have the potential to color the nature of those deals for years. As the smoke clears from round one, it appears that the banks chose to start by playing this game the Apple way.

PaymDue to the lack of information about Samsung Pay’s payment methods, it’s premature to make any definitive statements. Although Samsung typically incorporates its own customized features, applications, and interfaces into its Galaxy S phones and Note devices, it remains unclear how this will translate to the use of the Android operating system. For more than three years, the Galaxy smartphone range has included fingerprint sensors and NFC capabilities. Samsung Pay, which has replaced Samsung Wallet, may not offer any significant changes.

It is possible that only the outer appearance will be visually pleasing and attractive. Google made public its plan to provide developers with a series of APIs for their operating system’s payment module. Apple Pay has been a clear leader in the market since its launch in late 2014, gaining significant popularity, particularly in the United States, with its NFC-enabled iPhone 6 and iPhone 6 Plus running on the iOS 8 operating system. The latest smartphones from Apple support both NFC technology and fingerprint readers for use with Apple Pay.

At MWC, Samsung clarified and confirmed the support of both NFC and a secure magnetic technology on the new Galaxy S6 and Galaxy S6 Edge, which came after the acquisition of LoopPay. The magnetic technology gives users the ability to make in-store payments at stores with conventional payment terminals that work with magnetic stripe cards. Samsung’s recent request and notification to its users about the discontinuation of its older Samsung Wallet service, effective June 30, except in Korea, As per internet news and rumors, Samsung Pay will be available in the U.S. and Korea this summer, but I can’t confirm or take any responsibility for the truth of this news.

AndpayAndroid Pay: I was reading on some blogs last week about Google’s set-up of vending machines in the press area at I/O for the Android Pay demo, which was a brilliant idea and also had a couple of Nexus devices that were already preloaded with the software.

To buy a Coke, all one had to do was tap a Nexus 6 to the terminal, and with some combination and configuration of an American Express card along with a MyCoke Rewards loyalty card that appeared on the screen, Some said, “The phone is smart enough to know that you are using Android Pay at a vending machine”.

Android Pay will most likely (as nothing is clear to date) require banks to partner with the card schemes. As financial technology and mobile technologies seem to go hand-in-hand, we need to figure out how people use this technology to manage their money.

Plus, CNN has forecasted that this group of 18- to 35-year-olds (this age bracket varies depending on who you ask) will have more buying power than any other generation, making this an appealing market for financial professionals to pay attention to and give a strategic angle to their business plans and roadmaps. Card credentials will be hosted on an HCE or cloud server, and tokenization will be rolled into the offering of the scheme.

How this would compare with Samsung Pay or Apple Pay is not clear, nor is there any forecast by any expert on how this will be taken by the market or whether it will dominate the market for mobile payments. The Android Pay solution appears to be a scheme-hosted HCE service with Android branding. Saying anything about this junction would be like playing an Indian traditional game that is normally played by newlywed couples, which is to find a small ring in a huge bowl full of other material and thick black liquid. Google is preparing to deliver a hasty response to Apple Pay in the US.

The difference will probably be a service more similar to Apple Pay. Right now, with Google Wallet, your transaction goes through Google, and it shows up in your bank statement as Google (kind of like how PayPal works). With Apple Pay, it’s just as if you were using the card; this way, you get things like cash back rewards points at specific retailers that you wouldn’t get with Wallet.

Android Pay leaves us with an abundantly large number of questions that remain unanswered on how exactly Android Pay will work for both developers and users, but it seems clear that Google is hoping to streamline the whole process of mobile payments both online and offline. Like said before, there are single-tap transactions, which were demonstrated in the conference within Android apps, as well as fingerprint-authenticated purchases in stores for users carrying the right hardware.

Android Pay will support NFC and BioMetric, and most likely, Google and Samsung will not travel on the same train on their journey as their speed and milestones are unlikely to marry.

Microsoft Payments, also known as MS Pay, may join Apple, Android, and Samsung in the pay war or jungle. Windows 10 for phones supports host card emulation; licensing makes it official.

mpayMicrosoft is looking for licensing to be a money transmitter, suggesting that the company is taking the next steps to develop its own mobile payments platform akin to Android Pay, Apple Pay, and Samsung Pay. Some rumors say a breakthrough has been achieved in Idaho by getting a license.

Microsoft announced that its handset would be supporting HCE. HCE is a simple method of transmitting credit card information without relying on a secure element embedded in a SIM. Newer Android phones use HCE to transmit NFC signals to terminals, and the benefits of the scheme mean that third-party developers can build NFC functions into their apps. The elimination of the Secure Element requirement makes the payment platform SIM-independent, and hence HCE threatens and upsets carriers.


Conclusions:What can be deduced from this conflict? Will it cause a global shift (which is unlikely), result in a noteworthy victory, provide a clever exploit, or merely function as an indicator that this direction is uncharted? It is crucial for businesses to choose a system that aligns with their strategies and objectives and corresponds with the market they are operating in. Although there has been an increase in mobile payment announcements, it remains uncertain whether such services will significantly impact the sales of smartphones that support them.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.

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