Web: The Next Big Competitors for Android Pay and Samsung Pay: Banks

October 2015 by: From The Web

Eighteen months ago, rulings by Visa and MasterCard gave banks the chance to become big players in the emerging industry of mobile payments. They are finally starting to take advantage.

Earlier this week, Capital One became the first U.S. bank to release tap-to-pay functionality in its Android app, giving in-store shoppers a way to pay with their phones that’s powered by a financial institution they trust. Industry insiders believe other U.S. banks will follow suit, using a technology newly built into Android’s operating system*, called host-card emulation, that allows apps to access payment information stored in the cloud.

At a high level, the development means that shoppers will have more choices for mobile payments as the idea of paying in stores with phones becomes more popular. It also means that Android Pay and Samsung Pay mobile payment services could lose out on attracting users who aren’t technology early adopters and trust their bank’s app for payments more than one made by a big tech company.

Beyond that, it’s too early to quantify what affect on future mobile payments revenue competition from banks might have for Google or Samsung. That’s because neither one takes a cut of mobile payment transactions like Apple does with Apple Pay, so mobile wallets aren’t direct revenue generators for them. A Samsung exec, however, said at a press briefing this year that the company could eventually charge merchants to place deals in the Samsung Pay app. It’s logical then that competition from banks could put some dent in that future business.


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