It's a battle full of 'pays'

By Aditya Kumar Saroj

Tim Cook says Apple Pay will revolutionize the way we transact. Google always has a horse in every race, so came Android Pay into existence. A major brand has seen the beginning of its gloomy days, so came the answer at the MWC 15. If you did not get me, I am talking about Samsung. As perhaps now known worldwide, Samsung released its new galaxies and a new payment system called, Samsung Pay.South Korean tech giant Samsung had suffered a drop in profit in Q3 of 2014. It's profit came to its lowest level since Q2 of 2011. Yes, this is the beginning of the gloomy days. And Samsung is struggling. It's of course not that Samsung is dying, but it is trying hard to survive. Samsung still is 30th on World's Most Admired Companies according to Forbes (2015). But the recent removal of Samsung from the top in India by Micromax, has resulted in a worldwide ripple.Samsung’s new mobile payment system, coming this summer, will work even at the millions of old-fashioned checkout terminals that don’t have a wireless connection. That solves one of the big limitations of Apple’s mobile pay system, which only works at the 200,000 or so newer terminals in the U.S. that have been upgraded with wireless chips.Samsung unveiled the new Samsung Pay feature on Sunday at the Mobile World Congress in Barcelona as part of the introduction of its new Galaxy S6 smartphone. The new phone will include a Near Field Communication chip, just like the newest iPhones, allowing the payment system to work wirelessly at stores with similarly equipped checkout terminals.But Samsung is also including technology it acquired last month when it bought Boston-based start-up LoopPay. The technology allows a phone to send out magnetic signals that register as a swiped credit card at old-fashioned checkout registers, so that it will work wherever credit cards are accepted.

When Samsung acquired LoopPay, it was pretty clear that it wants to answer Apple Pay as mentioned on PlayBlox! earlier.
Samsung Pay users will be able to approve transactions with a fingerprint, much like Apple’s system. And the phone will transmit a special, one-time code instead of a full credit card number, to enhance security, just like Apple. Samsung also rounded up many of Apple’s partners including Visa, Mastercard, American Express and the largest banks, including JPMorgan Chase and Bank of America.
All of which possibly leaves the field open to Google and its wireless partners. The search giant offers Google Pay as an app for consumers, as well as a new underlying software feature called Android Pay, which lets developers include payment features in their own apps.

Google will encourage developers to use add the underlying features, while still competing against all comers to convince customers to use its wallet, Sundar Pichai, senior vice president at the company, says.
“We always try to win the users’ hearts and minds,” Pichai said, speaking at the Mobile World Congress in Barcelona on Monday. But as the stewards of the Android operating system, Google will also seek to work more closely with Samsung on its competing payment app. “We are on slightly different timelines,” he said.
Apple on one hand has done a great job. Initially, 500 banks and financial institutions pledged support for the service, but that number has swelled up to around 750, with even more requesting to partner up. Cook said Apple Pay now represents 80 percent of contactless transactions at Panera Bread, while upscale grocer Whole Foods saw a 400 percent increase in contactless payments since the service launched.
Tim Cook has already mentioned that 2015 is going to be the year of 'Apple Pay'. That may become true since Samsung Pay does not look like a tough competitor, according to me.
Surely, 2015 will the 'Year of battle of 'Pays''!

Measuring Apple Pay's success: Give it years, not months

With Apple Pay, iOS users can carry out purchases using the new iPhone and TouchID.Apple

With the iPhone 6 and iPhone 6 Plus reaching tech buyers Friday, what could be one of Apple's most lucrative services -- Apple Pay -- makes a debut.

But don't expect Apple Pay to change the mobile payment world right away. Why? Five primary reasons:

• It'll take time for the latest iPhones to reach the installed base. Analysts have been saying that the iPhone 6 upgrade cycle will be Apple's largest given the number of iPhone 4devices in the market.
• Even if Apple's iPhone 6 and 6 Plus devices swarm the market, consumers will have to adopt Apple Pay and change their behavior. It will take years for shoppers to stop whipping out cards and start using smartphones to pay. Some percentage of iPhone 6 customers -- say 25 percent -- will adopt Apple Pay out of the gate.
• The infrastructure isn't ready. Retailers have to adopt new point-of-sale systems that are more secure by October 15, 2015. Some retailers such as Home Depot and Target will upgrade quickly. Other retailers may drag it out. It remains to be seen if these new checkout systems can handle Apple Pay. The consensus view is that the systems will.
• Security and privacy will be a concern. PayPal has already tried to play the fear, uncertainty and doubt game about Apple Pay with ads. Apple launched a privacy site to outline its stance. Any company playing in the mobile wallet game will have to outline security precautions just to entice consumers to change behavior.
• There is time for Google to enter the mix. Give Apple credit. The company lined up all the key banking players and card issuers, timed Apple Pay's launch well and may have even provided a great use case for its Apple Watch. But what Apple really did was shine the spotlight on mobile payments and leave about six months to a year for Google to enter the fray.

Mastercard, Visa and American Express all see Apple Pay as a way to increase the volume of transactions. Remember that the enemy for the entire mobile payment ecosystem is cash transactions.Mastercard, a key Apple partner that worked on Apple Pay's tokenization and platform for more than two years, had its investor meeting this week and the conversation with analysts was dominated by Apple Pay.

Chris McWilton, president of Mastercard North America, noted that there are too many wallets and some will fail. McWilton said Apple Pay should do well as will his company's MasterPass. The general theme is that tokenization -- an encrypted number that replaces card digits -- is the best way to secure retail conversations. McWilton said:

The answer there to secure that channel and growing channel is tokenization. Simply put, tokenization is a mechanism to replace a 16-digit card credential with a one-time use encrypted number and our platform for tokenization is called MDES, MasterCard Digital Enablement System.

It is the enabler of what you saw last week in Cupertino, Apple Pay. So it basically provides tokens that will go on the iPhone 6, the iPhone 6 Plus, and the Apple Watch to make payments commercially on time, either NFC or in app or online.

We have been working with Apple for 2 1/2 years on standing up that engine...

The MDES is not exclusive to Apple. We will use MDES for other wallet providers, other payment applications. Android, Google, whatever the case might be we are prepared to help stand them up as well. Anything we can do to secure e-commerce payments is going to grow that business and grow our share of it, so we are very happy to be there with that.

Our own wallet platform is MasterPass. I joke around the office that I think there are days I think we are in walletpalooza. Everybody has got wallets and not all of them are going to survive.

Rest assured that the Google's Android ecosystem will also have something similar to Apple Pay. What's unclear is whether Google can line up the comprehensive list of partners that Apple did.

Those aforementioned mobile parts highlight how Apple Pay could be a huge business and a great customer loyalty tool (if apps and photos are sticky wallets are even more so). But Apple Pay will take time to percolate. There's a scenario where Apple Pay will take enough time that people will start questioning the success in six months to a year. The real time frame to measure Apple Pay success is likely to be over three to five years.

Apple locks iPhone 6 NFC to Apple Pay

Apple Pay uses NFC for contactless payments.James Martin/CNET

After months of speculation, Apple finally came good on rumours of NFC functionality at last week's launch of the iPhone 6, iPhone 6 Plus, and Apple Watch. However, the NFC capability on the new devices is set to be locked down for use only with Apple Pay mobile payments.

While NFC has been present in Androidsmartphones for some time -- Samsung, Sony, and Nokia have all rolled the technology into their flagship device launches -- Apple is a new arrival in the realm of near field communications.

At last week's Apple event, the company announced Apple Pay -- a new mobile payments service that utilises NFC technology in conjunction with its Touch ID fingerprint scanner for secure payments that can be made from the iPhone 6, iPhone 6 Plus or Apple Watch.

Apple also announced a number of retailers that would accept Apple Pay for mobile payments at launch.

However, Cult of Mac reports that NFC will be locked to the Apple Pay platform, meaning the technology will not be available for other uses.

An Apple spokesperson confirmed the lock down of the technology, saying developers would be restricted from utilising its NFC chip functionality for at least a year. Apple declined to comment on whether NFC capability would remain off limits beyond that period.

NFC can be used for a wide range of tasks, including pairing a smartphone to speakers for audio playback and sharing contact information between devices, while NFC tags open up the world of customisable automation to anyone with an NFC-enabled device. However, this latest word from Apple seems to indicate that after the long wait, Apple fans may not have all the NFC functionality they desired.

Apple locks iPhone 6 NFC to Apple Pay

Apple Pay uses NFC for contactless payments.James Martin/CNET

After months of speculation, Apple finally came good on rumours of NFC functionality at last week's launch of the iPhone 6, iPhone 6 Plus, and Apple Watch. However, the NFC capability on the new devices is set to be locked down for use only with Apple Pay mobile payments.

While NFC has been present in Androidsmartphones for some time -- Samsung, Sony, and Nokia have all rolled the technology into their flagship device launches -- Apple is a new arrival in the realm of near field communications.

At last week's Apple event, the company announced Apple Pay -- a new mobile payments service that utilises NFC technology in conjunction with its Touch ID fingerprint scanner for secure payments that can be made from the iPhone 6, iPhone 6 Plus or Apple Watch.

Apple also announced a number of retailers that would accept Apple Pay for mobile payments at launch.

However, Cult of Mac reports that NFC will be locked to the Apple Pay platform, meaning the technology will not be available for other uses.

An Apple spokesperson confirmed the lock down of the technology, saying developers would be restricted from utilising its NFC chip functionality for at least a year. Apple declined to comment on whether NFC capability would remain off limits beyond that period.

NFC can be used for a wide range of tasks, including pairing a smartphone to speakers for audio playback and sharing contact information between devices, while NFC tags open up the world of customisable automation to anyone with an NFC-enabled device. However, this latest word from Apple seems to indicate that after the long wait, Apple fans may not have all the NFC functionality they desired.

Apple Pay review: Simplifies payments, improves security

Few people use their phones to pay for goods and services at retail stores. That's because it's not difficult to pull out a plastic credit card, however insecure that technology might be. Apple is trying to change that with Apple Pay, which will come to the new iPhones in October and the upcoming Apple Watch when it's out.

Apple improves over existing systems in a few ways:

- Apple already has your credit card information from iTunes, so setting Apple Pay up with your first credit card is easy. To add additional cards, you can either enter the details or snap a photo.

Apple Pay improves over existing payment systems in a number of ways.

In my brief tests, the phone grabbed my credit card numbers correctly, though I sometimes had to enter my name and expiration date myself because of poor lighting conditions. But grabbing those numbers is a good start, as I'm prone to make typos with 16-digit numbers otherwise.

- Apple uses the phone's fingerprint identification system to authorise purchases. Other wallet apps require passcodes, which can make mobile payments take longer than simply pulling out your credit card.

- Apple stores card information on a secure chip on your device, not on its servers. And it's not even your real card number. Rather, Apple verifies your card information with your bank and then stores an alternative card number.

That way, if a merchant's system gets hacked, only the alternative number is compromised, and that number would require one-time security codes available only with the physical possession of your phone.

- The system works with credit cards issued by a variety of banks, including all three of mine. A payment system called Softcard, formerly known as ISIS, doesn't support any of my three banks. Amazon's Fire phone has a wallet app, too, but it doesn't even do credit cards, which is surprising for a retailer. It works only with gift cards.

Apple Pay's usefulness will be limited until more merchants install the necessarily equipment, but many chains already do and more are coming.