Deploying mobile payments on Android
From a bank’s perspective, if they want to get onto an iPhone, they have to do it Apple’s way. If they want to get on to Samsung’s devices, they have a range of options:
Sign up with Samsung Pay:
In this model banks can rent access to the eSE and connect to one of a range of trusted service managers (TSMs) that are connected to the service. In this way, Samsung Pay recreates the embattled SIM-based model for NFC deployment.
The biggest limitation in this instance, however, is that it is only supported by Samsung devices.
Sign up with Android Pay:
At this early stage, it looks like Android Pay will require banks to partner with the card schemes. Card credentials will be hosted in an HCE/cloud server and tokenisation will be rolled into the offering from the scheme.
Implement HCE and tokenisation in house or with their preferred host:
Despite requiring a greater upfront investment, taking control and implementing a standalone mobile NFC payment application has a number of benefits for banks.
For one, they can reach all Android devices (supporting KitKat 4.4+) and maintain their independence – there is no need for them to send all of their transactions to the schemes.
Will Android Pay dominate the mobile payments market?
Will Android Pay dominate the market for mobile payments and go head to head with Apple Pay? Currently, it is looking unlikely.
On initial inspection, the solution appears to be a scheme-hosted HCE service with Android branding, enabling Google to deliver a rapid response to Apple Pay in the US.
While Apple Pay will undoubtedly roll out around the world, with most banks ultimately jumping aboard, market fragmentation in Android is likely to inhibit the pace of Android Pay’s deployment.
In the near term, the battle is likely to be more about which service wins on Samsung’s devices which currently account for 25 percent of the market.
There may be no clear winner for some time and therefore no clear Android competitor to Apple Pay.
But the good news is that most smartphone users will have a mobile payment option in the very near future as NFC finally comes into the mainstream.
By Martin Cox, Global Head of Sales, Bell ID