Five ways payments will be different in 2024

November 24, 2015
/   Voices

Predicting the future of cash and card payment volumes is arguably a fool’s errand – but Payments UK, Britain’s new trade organisation for the industry, is in a good place to have a go...

Contactless cards: Opt-in or opt-out?

/   Voices

Australia is toying with the idea of creating an opt-in function for contactless cards, in a move that highlights the problems around coping with new payment technology and how fraud risks are handled.

Five EMV lessons for the US

/   Voices

The EMV liability shift has occurred in the US, so what can we expect to see happen in the coming months and years as a result of this change?

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

There was a time when the launch of a new mobile payment system from one of the world’s largest and most dynamic technology companies would have been a massive event. Yet when Google rolled out Android Pay in September, there really wasn’t too much buzz. And that lack of excitement says more about the state of mobile payments than a hot new product might.

First, let’s acknowledge that Android users haven’t exactly been waiting breathlessly with excitement about a new mobile payment capability. For one thing, they can already make payments and more with their Android devices—Google Wallet has been around for years. It even enables users to send money to anyone in the country with an email address. Samsung Pay is another option, and in some ways even more user-friendly. With this app, payments can be authorized just by scanning a finger on the home key. There are independent alternatives too, like Venmo and Square.

Still, Android Pay is different, and in some ways more fundamental. While Google Wallet and Samsung Pay are both apps, with all the advantages and headaches that implies, Android Pay is embedded in the operating system. The minute the device is placed next to the credit card terminal, it signs on. It even offers prompts to use available loyalty or gift cards. Just tap, pay and benefit.

The security levels are quite high as well. Android Pay doesn’t send a credit or debit card number with the payment—it uses a virtual account number to represent the financial information, which makes it easier to keep the card details safe. And just like those apps, it builds on near field communication (NFC), which most Android devices recognize.

But there are some obstacles to widespread usage too, at least for now. By using the debit and credit cards in the transaction, Google Wallet and Samsung Pay could be processed just about anywhere. To use Android Pay, however, the merchant needs to actually support Android Pay. Sadly, the list of retailers and other business currently featuring that capability is still quite small.

There’s a reason for this seemingly backward step: Transactions in Google Wallet show up as Google purchases, not tied to specific card companies, which negates the advantage of potential cashback offers and other rewards. Android Pay brings them back in the fold, while maintaining a high level of security—a custom PIN, pattern, or password lock is required to use the service.

Most importantly, the entire practice of mobile payments is ridiculously easy—all it takes is for a user to add a credit or debit card to the account, and a mobile device. For a generation weaned on technology-enabled instant gratification, it’s the ultimate goodie.

So why is adoption still so sluggish? Why isn’t everyone using mobile payments?

It’s true that many vendors lack some of the capabilities needed to manage online payments, particularly since many of the technologies keep moving. The Payment Networks’ Liability Shift for the EMV standard was long designated for Oct. 1, yet a survey out in September noted that only 27% of all U.S. merchants were ready. (For the record, the number is expected to be closer to 50% by the end of the year.)

But the problem may be more fundamental than that. There are times when a new technology capability drives significant behavioral changes, and others where an app or service is rushed out to meet market demand. In this case neither of those is really happening—the technologies are available, the need is there, and everyone stands to benefit, yet growth is still remarkably6 slow. Apple Pay was supposed to set the market on fire, but it just didn’t happen.

Could it be that there are simply too many options for the market to coalesce around one, which is what’s needed to drive mass adoption? Or are consumers more careful with money issues than they are in other practices, and just the launch of another option won’t make a big difference?

We know mobile payments will become routine at some point; the benefits are too great for it to fail. So any guesses on when that will be?


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Brad Strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.