What Android Pay means for card issuers

In 2014, Apple brought mobile payments to the mainstream with its introduction of Apple Pay. In 2015, competitors are jumping into mobile payments to facilitate consumers’ desire to use mobile devices to make payments at the point-of-sale. Already this year, we have seen a series of responses to Apple Pay: PayPal purchased Paydiant; Samsung announced its upcoming mobile payments product Samsung Pay; and Google acquired Softcard. Last week, we got an even clearer picture of how Google intends to compete as mobile payments gain momentum with both merchants and consumers.

With Google’s confirmation of Android Pay as an open API, the market became even more exciting. An open API, unlike a proprietary API, paves the way for more developers to build payments functionality into their own apps, including mobile banking apps. TMG has long contended the market winners in digital banking will be those that combine banking and payments functionality. Consumers want one clear view of their complete financial picture. The credit unions and community banks looking to provide that may find an easier path with the release of Android Pay.

In terms of consumer access, Android Pay will come pre-installed on devices with the latest operating system (Android M) and will be capable of both in-app and in-store transactions. Ironically, the same carriers with which Google once butted heads to offer a mobile wallet tool (AT&T, Verizon and T-Mobile) will now pre-install Android Pay on their devices, likely including the Samsung Galaxy units. In comparison, Apple Pay is only available to iPhone 6 and 6s owners, limiting its reach.

continue reading »