by: Zilvinas Bareisis
Over a year ago, we published a 2014 edition of our annual Top Retail Payment Trends Report (2015 edition is here), in which we distinguished between app-based wallets – majority of mobile payments solutions in the market at that point – and device-based wallets. We suggested that payments would become ever tighter integrated into the device and the operating system (OS) and that we will see the emergence of device-based wallets, “which store securely on the phone a token associated with payment credentials, which can be discovered and summoned as needed by any app or a site reached via mobile browser.”
Then Apple Pay came along and demonstrated to everyone the beauty of a payments solution tightly integrated into the OS and the device itself. There is no separate wallet app; customers can configure the solution via the Settings page and store their cards in Passbook. And the token of the credentials can be summoned for an in-store or an in-app transaction. Apply Pay raised the stakes for everyone in mobile payments.
The challenge for Google is that the Android ecosystem is nowhere near as tightly controlled as Apple’s. Yet, in the last couple of weeks, we’ve seen a few interesting moves that indicate steps towards OS and device-based wallets in the Android ecosystem. First, Samsung, the leading Android device manufacturer acquired LoopPay, which uses Magnetic Secure Transmission (MST) technology to enable mobile payments at the existing POS devices. Then, Google announced it was buying Softcard’s technology. Finally, the news just emerged that Google would be launching Android Pay at its Google I/O conference in May.continue reading »