7 big milestones that Payments Industry crossed this year

Over $879 trillion dollars of transactions passed the financial switches:

  • Number of transactions processed by Fedwire, which handles large-scale wholesale transfers: processed 132 million transactions for a total of $599 trillion.
  • Number of transactions processed by the Automated Clearing House (ACH) Network: 21 billion transactions with a total dollar value of $36.9 trillion. What’s ACH? ACH is an electronic network for financial transactions in the U.S. It processes large volumes of credit and debit transactions in batches.

Pay with Wearables and Internet of Things:


  • Numerous international exhibitions like the Consumer Electronics Show in Las Vegas, the Mobile World Congress in Barcelona saw the launch of Smart Watches by big companies like LG, Samsung, Sony, Qualcomm and many other players creating a wide scope for e-commerce and payment technology firms to target the smartwatch market space.
  • In February 2014, a company named LevelUp successfully deployed its payment platform on the Pebble smartwatch enabling the watch to generate QR codes which can be scanned at POS to make relevant payments.
  • Samsung’s Galaxy Gear 2 comes with an integrated camera which can find other applications in payment methods requiring visual imagery techniques. The LG GD910 smartwatch comes with voice commands capabilities which can find use in soundwave related payment technologies.
  • The Sony SmartWatch 2 is integrated with NFC hardware which itself finds wide use in payment domains. Casio’s G-shock smartwatch is BLE (Bluetooth low energy) enabled and can find use in Beacon related payment modes.

Google Glass:

  • Google Glasses hosts a wide range of features which can be applied to payment methodologies. Customized apps can be installed on this device to enable intuitive interaction with banking & e-commerce firms.
  • In June 2013, a Ukrainian bank named PrivatBank installed such an application which gave the glass user the power to perform a variety of payment options.
  • Using the app, the user can directly pay bills by simply clicking pictures of them, pay by voice at places like fueling stations and scan QR (Quick Response) codes by simply looking at them and order the payment process by simply saying Pay.
  • Other functionalities can be embedded involving authentication by QR codes at POS terminals as done by the company Intuit.
  • Practical scenarios are possible where users could simply find the nearby ATM using Google Glass, walk up to the machine, scan the relevant QR code and make withdrawals without the need of remembering PINs.
  • Banco Sabadell, a Spanish bank actually got an app developed in October 2013 to make such scenarios possible.

Internet of Things:

  • The internet of things talks about the virtual presentation of identifiable objects in the internet-like structure. One such prominent object is the smartband.
  • Those available in the market are also referred as activity trackers or fitness trackers. But the embedded technologies in these bands can find its usage in the payment technology forum.
  • In the past, companies like Disney have shown capability of NFC enabled bands through MyMagic+ kind of solutions.
  • The band Disney offers to the people coming to its theme parks to be used for payments at rides, stores, hotels, etc.
  • The recent times have shown big companies like Samsung and Huawei coming with advanced form of bands which can truly be called as smartBands.
  • The Samsung S Band is a known activity tracker which has unique RFID capabilities to even track your smartphone. Such RFID capabilities can find a use in RFID enabled payment applications.
  • Samsung Galaxy Gear Fit and Huawei’s TalkBand can find significant use in the NFC tagging based payment system and Beacon related applications.

Bypassed the secure element and HCE:

On 20th March 2014, NFC forum issued a statement that essentially waved the green flag at Host Card Emulation (HCE). As the industry consortium dedicated to the global deployment and adoption of NFC services, the NFC Forum sees HCE as a promising addition to the portfolio of NFC solutions that could potentially accelerate market growth. HCE is supported by NFC Forum specifications, including the NFC Controller Interface (NCI) specification, which in combination with other standards, such as ISO 14443 and JIS X 6319-4, enables HCE implementations. Service providers need to evaluate and determine the best place to store credentials for their solutions, keeping in mind the trade-off between security risks and convenience.

The key goal of HCE is to bypass the need for an app to access a phone’s secure element in order to make an NFC payment transaction. HCE accomplishes this by storing payment information in the cloud rather than on the secure element. So where did it all start? While some startups were working on it, the real momentum came when, with the release of Android 4.4, Google introduced a new platform support for secure NFC-based transactions through Host Card Emulation (HCE), for payments, loyalty programs, card access, transit passes, and other custom services.

Industry experts on HCE:

Nick Holland, senior analyst of payments at Javelin Strategy & Research Host card emulation may also provide some fraud mitigation. We will see a more holistic response to effectively dealing with card fraud and plugging the gap, when fraud migrates to card-not-present transactions

Thom Janssen, Managing Consultant with UL Transaction Security says HCE may accelerate the introduction of NFC services, because it provides an optional ‘more simple but less secure’ way to provide an NFC card emulation service. It has great added value for service providers that can accept a reduced level of security in exchange for an improvement of other factors such as time to market, development costs and the need to cooperate with other parties.

Tom Noyes says HCE Apps will replace the SE based card emulation apps. Replace is more from a business context than from a technical one. SE based applications (like a door key, or healthcare card) could still survive.. but why would anyone want to pay the MNOs RENT if you don’t need to.

Entry of Tech giants such as Amazon, Apple and Facebook marks rapid innovation ahead:


While e-commerce is on the rise and there is no shortage of Tech Press coverage about it being a $1.5 trillion industry in 2014, that number remains but a fraction of the staggering $15 trillion global commerce figure—and Amazon knows it. If you know anything about the retail giant, you know they’re not content to be a big fish in a small pond. That is why they have been making several steps to enter, and possibly dominate brick and mortar as they have with e-commerce.

Last year, we learned that Amazon acquired GoPago Inc., a mobile app, enabling consumers to pay for goods before picking them up at a store, with the retailer POS system to processes those orders. This was possibly the first major hint towards Amazon’s intentions to enter the retail space, but intentions were still unclear.

Fast forward to 2014, where we have recently learned that Amazon will be offering brick and mortar retailers a Kindle checkout system. If successful, the implications would be tremendous. In addition to POS sales, and potential profits off sale transaction percentages, amazon would have access to a currently untapped vault of data surrounding in-store spending trends. It has been reported that the checkout system would include Kindle tablets and credit card readers.

If a Kindle-based POS system doesn’t go far enough to convince you that Amazon cares about retail, news of their own physical stores set to open as early as the coming months should leave no doubt. And what better place to set up shop than in their hometown of Seattle. While details are vague, it has been indicated that the stores will be nothing but the opposite of what you will find at The boutique locations will be stocked with high-end, high-margin items. It can be expected that Amazon will take this opportunity to give consumers an exceptionally hands-on experience, something they have never been able to provide online. Rings a bell? Yes Apple has mastered the art and science of retailing. Other tech firms are also trying to do it – Google, Samsung, Microsoft and others.


It looks like Facebook is following the same path as Amazon – the social networking giant is currently waiting on an approval from the Central Bank of Ireland in order to begin their mobile payments service. This is HUGE!

Previously, Facebook has tried to enter the world of payments via Facebook Credits in 2011 and Facebook Cards. These systems did not catch on as the company would have liked. The company also partnered with PayPal to enable users to link their credit card information to Facebook login, making online purchases much quicker.

Last year, the company acquired almost $900 Mn via fees charged on transactions through the social network. This usually applies for in-app purchases on their video games. The company takes a 30% cut of app payment revenue generated by any game on Facebook. However, most of the company’s revenue is still obtained through advertising which is why Facebook is so keen to enter the payments industry.

Mobile First Banking takes centerstage:

In the last few years, a new genre of virtual banks has come up, that is primarily targeting the tech-savvy mobile users for selling banking and financial products. Whether such companies (Mobile-Only banking services) will have a telling impact on the payments industry in months to come, or not, but these Mobile banks are certainly making lots of buzz in the industry as of now. Let us take a look at some of the key players present in this space and prospects/potential of such banks:

Some of the key players in this category are: GoBank, Simple, Moven and Fidor Bank. All such banks are trying to target customer demographic that is used to mobility products and services. They don’t have a bank license of their own, and are basically working as front-end to an FDIC-chartered bank.

On the other hand, Fidor Bank, the lone major player in Europe, has its own banking license. Thus, it offers special services like peer-to-peer lending, crowd-sourcing, and bonus payments for interactions within the community.

Payment is one of the key industries in which mobile first trend has made a profound impact. These mobile banking services are cost effective for the banks and the customers alike. There is no requirement of minimum balance, and most of the transactions are charge-free!

75+ Mobile Wallets appear but struggle to gain acceptance. What started next is amazing - linking with physical cards:

In November 2013, Google launched the Google Wallet Debit Card. A question was being asked in some forums that whether Google in its response to the launch of Isis program across US, shot electronic payments innovation in its head.

Some details about the prepaid card:

To load it, users can pull funds from a bank account, another debit card or credit card, or from friends who can either email money via Gmail or send it via the Wallet app.

Users can utilize their Wallet Balance to shop and pay in stores by swiping their card at any of the MasterCard® locations.

Their Wallet Balance can be used at ATMs to withdraw cash. Some ATM providers may charge a fee for cash withdrawals.

Users get instant notifications on their smartphone to help them keep tabs on all of their transactions.

Apart from spending it with Google Card, User’s can utilize their Wallet Balance to buy on Google Play, send money to friends, YouTube and other products. It can also be used to transfer money to the user’s bank account or tap & pay in stores.

The Google Debit Card can be ordered for free via a Google Wallet account page or the Android Google Wallet app. It is currently operational only in the U.S.

On 22nd January 2014, T-Mobile announced that the company is extending its Un-carrier consumer movement to personal finance – transforming smartphones into personal money managers that can free people from excessive fees they often pay to use their own money. The company calls this next phase of its consumer revolution Mobile Money by T-Mobile®.

Mobile Money is very similar to the approach Google took with both Google wallet app on smartphones and a debit card. But T-Mobile’s Mobile Money packs much more – a smartphone app that works at merchants, for bills, for money management, T-Mobile® Visa® Prepaid Card, and surcharge free nationwide ATM network that brings many of the features of a checking account. Add to that, get your tax refund directly into your T-Mobile Visa Prepaid Card and much more.

ATM, overdraft and monthly maintenance fees all hit record highs last year, according to Bankrate’s 2013 Checking Survey. Mobile Money helps counter that trend with the combination of a simple, smartphone money management application designed for use with a re-loadable T-Mobile Visa® Prepaid Card that offers many reduced fee or $0 cost services for registered T-Mobile wireless customers.

What’s amazing about T-Mobile’s Mobile Money offering is that they have tapped into the benefits of mobility and focused on the biggest issues faced by customers – cost, complexity, so many steps to do transactionary work and the fragmented experience. The setup and transaction charges are zero. $0 Purchase fee; $0 Reload fee in T-Mobile stores; $0 Monthly maintenance fee; and $0 Withdrawal fees at in-network ATMs. And if you want to deposit your checks? Just take a picture with your smartphone.

Bitcoin and other Cryptocurrencies have Taken Giant Leaps In terms of Acceptance, Understanding and Innovation:


In November 2013, I had discussed the Coin Card – a new hardware that enables users to store all their cards on a single card and manage it with the smartphone through BLE. A pre-order campaign had been planned by Coin for November 15th. The plan was to top out at $50,000. That limit was crossed within barely 40 minutes. The card basically went viral, and opinions from various parts of the industry seemed to point out that maybe consumers are not ready for a mobile wallet yet. In a similar move – and what could be a tremendous boost for the virtual currency – on 8th April 2014, Hong Kong based startup Cryptex launched the Cryptex Card.

Cryptex is the first debit card in the world that will enable users to convert cryptocurrency into cash at millions of ATMs and merchant’s POS terminals across the globe. This is regardless of whether the merchants or banks in question accept cryptocurrency or not.

SuperRewards and Vungle:

I have discussed many a time how Bitcoins could change the face of gambling and gaming Industries completely. Another colossal move that supports this statement comes in the form of SuperRewards – On 31st March 2014, the social and mobile game monetization giant announced that would begin enabling users to buy in-game items and virtual currencies via Bitcoin.

You can see big names such as gPotato, Aeria Games, Gaia Online and not in the very least – Sonly Entertainment online – count among establishments that utilize Playerize i.e SuperRewards. The addition of Bitcoin to this network or system could offer a huge boost to the cryptocurrency and impact the gaming industry itself in a huge way.

Vungle, the premier app monetization technology company and in-app mobile video advertising platform, has added bitcoin as a payment option to app developers. Vungle allows creators of mobile apps (iPhone and Android), to monetize their business to show 15-second videos in high definition that is integrated into the user experience.

The addition of bitcoin option to Vungle platform enables publishers and developers to expand their reach on the the company’s mobile ad network that covers over 4000 apps.It will also provide flexibility to keep more of what they earn because of the virtual currency’s lower transaction costs.

In addition, bitcoin exchanges are faster as compared to other transaction as developers don’t have to go through a financial institution. The target group of Vungle are specifically individual developers or small groups of developers. Vungle believes the long-term prospects of bitcoin is important enough to offer it as a payment option. Bitcoin has more potential as a payments system than as a widely used alternative currency.Developers in Vungle’s network include Wooga, Fruit Ninja creator Halfbrick Studios, ZeptoLab, maker of Cut the Rope, and Sega.

Stripe and Square:

Stripe recently began to test payments for Bitcoins among certain users. Stripe currently supports over 130 currencies globally, and Bitcoin will now be added to that list. The company will begin supporting payments via Bitcoin, through a private beta program that its users can sign up for. Merchants that utilize Stripe to accept bitcoin payments will automatically be paid out in the local currency of their choice.

In another major development, payments giant Square announced on 1st April, 2014 (it was no April’s fool mind you) that Bitcoins could now be utilized to purchase goods and services via Square Market.

We’re building tools so sellers can accept any form of payment their customers want to use. Making commerce easy means creating easy ways to exchange value for everything from a massage to a DODO case for your iPad. In that spirit, starting today, buyers can purchase goods and services on Square Market with Bitcoin, stated Square’s blog post.

Huntercoin and Dragon’s Tale:

With the creation of Bitcoin, Satoshi Nakomoto essentially opened up a new stream of innovation. We have seen a number of alternate crypto-currencies or Alt-Coins emerge over the last year – Litecoin, Namecoin, Peercoin, Dodgecoin, Mastercoin and many more. Frankly it was getting suffocating to hear of all those Bitcoin clones. In February 2014 however, a very interesting and innovative new P2P crypto currency was introduced – Huntercoin.

Huntercoin is the Worlds first peer to peer (P2P) decentralized Massively Multiplayer Online Game(MMOG). It definitely has appeal to both gamers as well as crypto-currency enthusiasts. Here, players control Hunters which harvest coins in a 2D virtual environment. The Hunters return to a spawn area after harvesting, where the coins are effectively ‘banked’. Participants collect Huntercoins (HUCs) inside a virtual environment through the application of strategy, teamwork and human effort. HUCs have a real world financial value and unlike other crypto-currencies.

Huntercoin is affordably accessible to the majority because dedicated and expensive ‘mining’ hardware isn’t a necessity according to them. These coins can then be converted into Bitcoins and real world currency. Basically, you get paid to Play! And not the other way round as it usually is.

Some of the other major companies that have begun accepting Bitcoin payments recently include –, TigerDirect.Com, Zynga and Khan Academy. Have a look at 27 physical and online merchants that accept Bitcoin.