By David Dorf-Oracle on Mar 02, 2015
What do you get when you add the following pairs? Samsung+LoopPay, Google+Softcard, PayPal+Paydiant? Answer: Viable ApplePay competitors.
First everyone and his brother had a mobile payment solution, then a select few rose to the top and got acquired. The cycle goes like this: innovation, consolidation, standardization. In this case, there's room for multiple standards, but not too many. When the music stops, somebody will inevitably be left without a chair. Today I feel like that's Samsung.
Google wants to play by established rules, but for the longest time telcos weren't letting them in the game. Their recent agreement with the backers of Softcard now level's the playing field. I think their ultimate strategy is the obvious one: advertising. Being part of offline transactions gives them access to the customer's eyes and intentions. Combine that with their existing online efforts and you have omni-channel marketing.
Approaching from a different angle, Apple is constantly looking for ways to remove the friction in everyday lives. Their focus is on the user experience of payments, making sure its as smooth and simple as possible. This either drives sales of existing devices or creates new markets. With ApplyPay they'll sell more iPhones and create a new market by eventually charging fees (that consumers won't see directly). They managed to dodge the telcos and get the backing of the banks, but that's no surprise given their track record in other industries.
On the other hand, PayPal is more aligned with the merchants so their acquisition of the MCX technology-provider makes lots of sense. Their goal is to offer an alternative to swipe fees that satisfies both consumers and merchants. Their work with Discover, beacons, and their Square-like fob are seeing some success with smaller retailers. The ability to create orders and do person-to-person payments also sets them apart.
Then there's Samsung, the smartphone manufacturer. LoopPay has very cool technology that transmits the card data to an existing magstripe reader through the air. So for terminals that don't support NFC, the consumer can still put the phone within 3 inches of the magstripe terminal and send the card data. That means that generally every existing merchant can already accept SamsungPay. But there are two issues. First, I'm not confident this system works 100% of the time. And second, its predicated on dying, insecure technology. Clearly Samsung isn't worried about either of those issues.
All these moves coupled with the occasional security breach makes this space very exciting. Sit back and enjoy the ride.