CashLess Payments – Payments industry of today has transformed into Payment-Intelligence and this intelligence came after a handshake with artificial intelligence and its bundle technologies. It would not be wrong if we compare it with either payment war, payment jungle or even just payment storm. The disruption in mobile payments domain brought in by well-known & big technology campuses i.e. Apple, Fintech’s, Android, Microsoft & Samsung can’t be ignored. Though all of them have no prior experience or knowledge in the banking industry. Yet commendable efforts from these campuses manage to force us to adopt digital money and discard the papers.

This article focuses on high-level discussion around ABCD of a driving force of FinTech. ABCD such as artificial intelligence, or AI, blockchain, cloud computing, and data. To showcase the current situation on what is happening in the payment industry. This post was originally published on 06-June-2015 on Linkedin


CashLess Payments Will Experience Massive Growth

Digital payments changing the face of the payments industry, with mobile money on the foundation of data science and machine learning there is a complete transformation. This transformation is leading to a desirable growth for new digital economies. The adoption of the existing system by new technologies like artificial intelligence, 4G (5G and 6G are not far), quantum computing and big data analytics indicating that we still have a long way to go to become 100% cashless society.

I got inspired for this post from the best SME of this domain i.e. “Charmaine Oak”  who is well known in this digital payments industry. She has excellent knowledge, expertise, and experience here. Recently she has written a very informative and detailed blog post dedicated to Android pay article at digital money. She is also the author of a few books around digital/virtual money.

Digital Money - Adapting to a Cashless Payments Ecosystem

  • If we had any global ministry of innovation for regulation and control than for sure to date cash will be only the single king. Since it’s not and mobile payments have proven itself as economic freedom already. The question here is:
  • In the current payment race/war where all these companies are running to?
  • How these big giants will get their share of this hot cake without experience and expertise?

The arrival of new entrant i.e Android Pay announced by Google at its I/O conference recently. 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. Android devices with KitKat 4.4 and above will have this as an inbuilt app.

Just imagine how powerful this central payment hub would be for consumers as the payment cake size continues to grow. Every payment player is upgrading its ecosystem with new technologies like artificial intelligence, machine learning, blockchain analytics-based applications, etc. Mobile devices coming to the market have these technologies as an integral part.

Banks and Card companies are working restlessly in the USA to get merchant conversion for their acceptance. Upgrades are happing round the clock to collect and share big data with the analytic machines which inturns produce astonishing use cases. Upgrades from older magnetic stripe payment to EMV compliment cards. POS terminals to support NFC payments from mobile phones or smart cards but a complete transition will take years. Pay attention to “S” at the end of word years in the last statement.


Mobile Payments & IoT

Last week I received an email asking for writing about window size of cloud-based and IoT based mobile payments. Thus decided to give it a try and I am writing this. What I know from industry experience as well as my reading on the internet so far on mobile payments is followed here. This segment is growing exponentially in the traditional way i.e Apple, Microsoft, Samsung, and Android Pay.

Digital Money - Adapting to a Cashless Payments EcosystemApple pay started in late 2014 with its proprietary handset iPhone-6 with IOS-8 that utilises an embedded secure element (eSE). Anyone wants to use Apple Pay, they have to do it Apple’s way oppose to the need where Android OS-based devices have many options and ways with market size on the global level is between 75 to 80% and got a range of options.

This IoT industry has a solution to a problem that is not understood fully to date. IoT is playing a key technology role to shape FinTech and MFS along with other technologies like artificial intelligence, machine learning, big data, data science, cloud and many more. How this solution present help and support to “mobile financial services”? MFS is a kind of a bundle for financial services solutions.

This bundle includes mobile payments, money, banking, commerce and many more. We will discuss the growth of the Internet of Things (IoT) and the ways it poses risk/opportunities to the financial services industry.


Apple Pay

The entrant of the late year 2014 (New in those days was it manage to sell 10 million handsets sold in the first 3 days of launch, oops how many they made ready for the launch phase?) launching Apple Pay (NFC Solution) from a technology perspective was neither a new offering nor a game-changer. Without a doubt, this launch was to set a trend for NBFTC (Non-Banking Financial & Technology companies) on how to enter into payments and the so-called banking domain and eat the share.

AP_bklUnlike most of the MNOs which keep on focusing and growing the mobile network in a positive way to penetrate this or can say isolated areas, millions of people are now able to connect via a mobile phone. As a result, mobile money has become a viable alternative to traditional bank accounts. The mobile payment relationship between the major banks and Apple is, to put mildly, a delicate one.

Apple 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 seems that the banks chose to start by playing this game the Apple way.

Google is processing to deliver a hasty response to Apple Pay in the US. The difference will be probably a service more like Apple Pay.  Right now with Google wallet your transaction goes through Google, it shows 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 cashback rewards points at specific retailers you wouldn’t get with Wallet.


Samsung Pay

It’s too early to make any confirmed comment in the absence of any clear picture on how different it would be. So for its payment approaches as it uses the Android operating system in most of its phones, but Samsung always tends to add its own custom features, apps and interfaces to its Galaxy and Note smartphone devices. It has fingerprint sensors and NFC in the Galaxy smartphone portfolio for over three years. Is Samsung Pay, a replacement for Samsung Wallet? maybe yes or maybe it’s different at only cover page level with fancy & colorful images.

Google announced to release a set of API for its OS payment module to the developers. Apple Pay, which launched last fall with the NFC-ready iPhone 6 and iPhone 6 Plus with IOS- 8 smartphones, gets much more attention, especially in the U.S., and is the clear frontrunner so far. Apple Pay works with NFC and fingerprint readers in its latest smartphones as well.

At MWC, Samsung clarified & 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 & 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 nor take any responsibility for the truths of this news.


Android Pay

I was reading on some blog last week about Google’s set up of a vending machine in the press area at I/O for the Android Pay demo was a brilliant idea, which 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 American Express card along with a MyCoke Rewards loyalty card that appears on the screen. Some said the statement “Phone is smart enough to know that you are using Android Pay at a vending machine”.

AndpayAndroid Pay most likely (As nothing is clear on date) will need banks to partner with the card schemes. As Financial Technology and Mobile technologies seem to go together, 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 give a strategic angle to their business plan and roadmaps. Card credentials will be hosted in an HCE/cloud server and tokenisation will be rolled into the offering from the scheme.

How this would compare with Samsung Pay or Apple pay is not clear neither any forecast by an expert on how this will be taken by the market or will it dominate the market for mobile payments?. Android Pay solution appears to be a scheme-hosted HCE service with Android branding.

Android Pay leaves us with abundantly bunch of questions remain on table yes unanswered questions on how exactly Android Pay will work for both developers and users, but it seems clear that Google is hoping to streamline the process of mobile payments both online and offline. Like said before here a single-tap transaction, which was, 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 & milestone likely not to marry.


Microsoft Pay

Microsoft Payments or may be known as MS Pay may join Apple, Android, Samsung in pay war/jungle. Windows 10 for phones support Host Card Emulation, licensing makes it mpayofficial. Microsoft 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 are breakthrough has been achieved in Idaho states by getting a license.

Microsoft announced that its handset would be supporting HCE. HCE a  simple method of transmitting credit card information without relying on a Secure Element embedded in a SIM. Newer Android phones use HCE to send 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 & upset carriers.

Waiting for some news or guidelines or for all this NFC revolution and usage from The MIFARE4Mobile® (Acts as a platform to guide the evolution of MIFARE4Mobile technology.) Industry Group consists of leading players in the Near Field Communication (NFC) ecosystem including many well-known players.

Saying anything beyond this would be like playing Indian traditional game normally played by the newlywed couple which is to find the small ring in a huge bowl full of others like material and thick black liquid.


Points to Note:

All credits if any remains on the original contributor only. We have covered all basics around adapting cashless payment models. The importance of such a quality system with full of big data are the backbone of any digital economy. The next upcoming post will talk about implementation, usage and practice experience for markets.


Books + Other readings Referred

  • Research through open internet, news portals, white papers and imparted knowledge via live conferences & lectures.
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.


Feedback & Further Question

Do you have any questions about AI, Machine Learning, Telecom billing/charging, Data Science or Big Data Analytics? Leave a question in a comment section or ask via email. I will try best to answer it.


Machine Learning (ML) - Everything You Need To KnowConclusions: What are the implications of this war? Is it going to change the world (unlikely), be a significant “win”, be a nice hack, or simply serve as a road sign indicating that this path is “UNKNOWN”? Which system is useful and needed for the business considering the market you work and synchronized with your strategies and goals. While mobile payment announcements from various smartphone makers are growing in frequency, still too much unknown & doubtful thoughts that such services will drive much interest in buying the smartphones that support it. The digital transformation i.e machines based financial services are set to explode by 2020. This is becoming a new revenue stream for many IT companies, professionals and experts.


 Hash Tagas : #payments , #mobilepayments , #mobilemoney , #money , #mobile

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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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