Launched in 2010-11, NFC payments gathered a lot of attention but failed to take off until 2014 when Apple launched its Apple Pay NFC-enabled services. Apart from Apple, Google and Samsung have also unveiled their payment systems—Android Pay and Samsung Pay. These are expected to be launched by the end of 2015 (test versions of these services are already being run at close to a million stores).
Android Pay is Google’s second attempt at mobile payments. Unveiled at Google I/O as the successor of Google Wallet, Android Pay would enable both in-app and tap-to-pay purchases on mobile devices. The feature is, as of now, not a part of the Android Open Source Project and hence, would not be available on Android’s forked-out versions. Only Android KitKat and above versions—coupled with an NFC-enabled device—would be able to use the payment service.
Some industry analysts believe that the launch of Android Pay is going to be a tipping point for NFC payments.
According to Chester Ritchie, SVP at Worldpay US, “Android Pay’s launch marks a significant milestone in the evolution of contactless payments. ‘Tap-and-pay’ has come of age in 2015 and we’ve seen usage skyrocket over the past six months. With Google adding its considerable commercial clout into the mix, a truly cashless shopping experience looks ever more likely. Shoppers are rejecting the old-fashioned idea of paying with cash in favor of the speed and convenience of contactless. Businesses which don’t embrace this new technology will quickly find themselves the losers to their more tech-savvy rivals.”
Chester further elaborated his views on NFC payments and Android Pay:
1. Android Pay and Apple Pay are more similar than different because both utilize NFC for the in-store payment experience. NFC has won the standardization war and consumers will benefit by making the mobile payment experience as ubiquitous as using a plastic card. Although Samsung uses MST technology, the experience should be similar to those accustomed to the NFC process. 2. Google has benefitted consumers and handset/software manufacturers alike by embedding the payment ecosystem into the operating system. This allows various handset manufacturers to support Android Pay and software developers to offer a standardized user experience. 3. Android Pay could represent a massive tipping point in the use of NFC in the United States, but not in the rest of the world. NFC-based cell phones have a large established market base across the globe. By unifying Apple and Android around NFC, it establishes a de facto standard for the majority of handsets manufactured today. The addition of Android Pay rounds out the market for the United States after the initial launch of Apple Pay.