CashLess Payments – The contemporary payments industry has undergone a metamorphosis, evolving into a realm of payment intelligence. This transformation has emerged through a collaboration with artificial intelligence and its accompanying technologies. Drawing parallels to a payment war, jungle, or storm would not be unfounded. The landscape of mobile payments has witnessed significant disruption, spearheaded by prominent technology giants such as Apple, Fintech, Android, Microsoft, and Samsung. Notably, these entities, despite lacking prior experience in the banking sector, have orchestrated commendable efforts that compel us to embrace digital currency, leaving traditional paper-based transactions behind.
This article focuses on a high-level discussion around the ABCD of a driving force in fintech. ABCD such as artificial intelligence, or AI, blockchain, cloud computing, and data To showcase the current situation in the payment industry.
CashLess Payments Will Experience Massive Growth
Digital payments are reshaping the landscape of the payments industry, and the incorporation of mobile money, grounded in the principles of data science and machine learning, has brought about a profound transformation. This shift is driving significant growth in emerging digital economies. Despite this progress, the integration of new technologies such as artificial intelligence, the impending advancements of 4G (with 5G and 6G on the horizon), quantum computing, and big data analytics suggests that we are still on a journey towards achieving a fully cashless society.
The ongoing adoption of these technologies underscores the continual evolution and potential for further advancements in the payments ecosystem.
I got the inspiration for this post from the best SME in this domain, i.e., “Charmaine Oak,” who is well-known in the 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. She is also the author of a few books about digital and virtual money.
Google recently unveiled a new player in the payment arena – Android Pay, during its I/O conference. This payment service will be accessible through a set of APIs, empowering developers to integrate an Android Pay button into their applications, while also enabling banks to facilitate payments within their own apps. Notably, Android devices running KitKat 4.4 and above will come equipped with Android Pay as a built-in application. This announcement reflects Google’s commitment to expanding its presence in the digital payment space and providing users with seamless and integrated payment options.
- If we had any global ministry of innovation for regulation and control, then for sure, to date, cash will be the single king. Since it’s not, mobile payments have proven themselves as economic freedom already. The question here is:
- In the current payment race/war where all these companies are running to?
- How will these big giants get their share of this hot cake without experience and expertise?
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.
Mobile Payments & IoT
Last week, I received an email asking for information about the window size of cloud-based and IoT-based mobile payments. Thus, I 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.
Apple Pay started in late 2014 with its proprietary handset, the iPhone-6 with IOS-8, which utilizes an embedded secure element (eSE). Anyone who wants to use Apple Pay has to do it Apple’s way, in contrast to the need where Android OS-based devices have many options and ways, with a market size on the global level of between 75 and 80% and a range of options.
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 risks and 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 in the first 3 days of launch, oops, how many they make 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 and technology companies) on how to enter into payments and the so-called banking domain and eat the share.
Unlike most of the MNOs, which keep on focusing on 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 it mildly, a delicate one.
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 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 probably be 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 of how different it would be. So for its payment approaches, 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 had 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 the cover page level with fancy and colourful images.
Google announced plans to release a set of APIs for its OS payment module to 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 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 rumours, Samsung Pay will be available in the U.S. and Korea this summer, but I can’t confirm nor take any responsibility for the truth of this news.
Android Pay
I was reading on some blogs last week about Google’s set-up of a vending machine 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 select some combination and configuration of an American Express card along with a MyCoke Rewards loyalty card that appears on the screen. Some said, “Your phone is smart enough to know that you are using Android Pay at a vending machine”.
Android Pay, most likely (as nothing is clear to 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 to 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 through the scheme.
How this would compare with Samsung Pay or Apple Pay is not clear, nor is there any forecast by an 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.
Android Pay leaves us with an abundant bunch of 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 is 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 and milestone are likely not to marry.
Microsoft Pay
Microsoft Payments, or what may be 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. 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 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 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 and upsets carriers.
Waiting for news or guidance on the NFC revolution from The MIFARE4Mobile® Industry Group, which includes top players in NFC, to guide the evolution of MIFARE4Mobile technology.
Extending further would be akin to engaging in the Indian traditional game often played by newlyweds, searching for a small ring within a large bowl filled with various materials and a dense black / white liquid. In essence, delving deeper into this topic may lead to a similar challenge of navigating through complexities without clear visibility.
Conclusions – The ongoing “war” in the mobile payment sector raises questions about its implications. While it may not change the entire world, it could signify a significant “win” for some, serve as an innovative industry hack, or act as a road sign indicating uncharted territories in digital payments. The usefulness of a payment system depends on the business, market dynamics, and alignment with strategic goals. Despite the increasing frequency of mobile payment announcements, skepticism remains about their ability to drive interest in supporting smartphones. Looking ahead, the digital transformation in machine-based financial services is expected to grow substantially by 2020, offering a new revenue stream for IT companies and professionals.
—
Points to Note:
All credits, if any, remain with the original contributor only. We have covered all the basics of adapting cashless payment models. The importance of such a quality system, full of big data, is the backbone of any digital economy. The next upcoming post will talk about implementation, usage, and practice experience for markets.
Books + Other readings Referred
- Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.
- Research through open internet, news portals, white papers and imparted knowledge via live conferences & lectures.
Feedback & Further Question
Do you have any questions about AI, machine learning, telecom billing and charging, data science, or big data analytics? Leave a question in the comment section or ask via email. I will try my best to answer it.
================= About the Author ============
Read about Author at: About Me
Thank you all, for spending your time reading this post. Please share your feedback/comments/critics or remark for more details about posts, subjects and relevance please read the disclaimer.
Facebook Page Twitter Blog Linkedin Pulse =================================================================
Informative