Windows Phone left out as Google Wallet swallows Softcard

Google purchased Softcard earlier this week, and today it posted a support page about what to expect from the mobile wallet service in the future as it shuts down. No surprises here: Android users should download Google Wallet, which is replacing Softcard. But for users of the Windows Phone Softcard app, there is no NFC payment alternative.

From the FAQ:

What about Softcard for Windows?
The Softcard for Windows Phone app will also be terminated. A specific termination date will be provided soon.

Softcard for Windows Phone, we hardly knew you. The app first launched on Microsoft mobile devices last fall for AT&T and Verizon subscribers, and allows users with NFC-equipped Windows Phones to make contactless payments at certain stores and restaurants, including McDonalds. Because Windows Phones aren’t equipped with fingerprint readers yet, users have to enter a PIN to unlock the digital wallet.

softcard windows phone

When Softcard exits the Windows Phone store, it leaves the platform without a NFC-enabled payments app. Microsoft Wallet can theoretically make NFC payments, but its acceptance has been slow, possibly due to resistance from the carriers (who were committed to Softcard.) Android devices can download Google Wallet, obviously, and Apple’s iPhones have Apple Pay. The Softcard FAQ doesn’t mention Softcard on iPhone, but the plans to enable Softcard on the iPhone using an “integrated secure SIM-based hardware solution” (an NFC-enabled iPhone sleeve) are probably on the back-burner, too.

The decision to pull the Windows Phone Softcard app might not be a snub intended to hurt Windows Phone. It’s possible that Google has simply decided that the relatively few Windows Phone users weren’t worth the extra resources to support the platform. Plus, Google Wallet could end up going cross-platform in the future. But it’s still an example of how Microsoft’s inability to gain traction with its mobile operating system is closing doors for its users, as well as for Microsoft itself in the rapidly heating-up mobile payments market.

https://www.youtube.com/watch?v=nNXc-fvIItw

 

Mobile recap: LoopPay vs. Apple Pay; new Pebble; LG Watch Urbane

Samsung has a new way to fight back against Apple and it has nothing to do with Google. This week, Samsung bought LoopPay; a company that adds mobile payments to phones using a magnetic field. Early reports and rumors about Samsung’s Galaxy S6 handset — expected to debut on March 1 — suggested a LoopPay tie-in.

Loop mobile payments

Google may not like it, but the acquisition gives Samsung a digital payment solution of its own, although the company can certainly still offer [company]Google[/company] Wallet on its Android devices. Google’s Wallet, four years in the making, hasn’t really resounded with consumers though. I’ve been using the service on and off since 2011 with Android phones that have an NFC chip inside them but retailers have been slow to adopt or support Wallet. That’s in stark contrast to [company]Apple[/company] Pay, which is a successful twist on the same NFC technology.

While LoopPay will work for now in the U.S. by spoofing the magnetic card stripe on current payment cards, Samsung will have to adopt it for the upcoming change in payments here. Samsung will need to create bank partnerships for EMV payments; essentially, we’re getting a payment card upgrade here later this year, which will require LoopPay to work with chip-and-PIN cards. LoopPay knew of this transition, so it’s not completely in the dark; we’ll see how it handles the change in a few months.

pebble action

Before then, we may have a new smartwatch or wearable device from Pebble. The company, which ran a hugely successful Kickstarter campaign in 2012 for its current smartwatch, is expected to announce something on Tuesday of this week. That’s based on a countdown timer that’s been busily ticking away since Thursday.

While we have no idea what Pebble is counting down for, the company did say earlier this month that it would be launching new hardware this year, along with a unique software interface. Perhaps we’ll get a glimpse of a new watch this week; hopefully, it’s not just a new band for the existing Pebble.

lg watch urbane gold

 

Even if Pebble does launch a new smartwatch, it’s going to compete with more Android Wear devices. The latest, LG’s Watch Urbane, hides its smarts in what looks like a very traditional analog timepiece. The stainless steel Urbane will be available in gold or silver finishes, uses the same 1.3-inch circular plastic OLED touchscreen display as the existing G Watch R and is aimed for the upscale smartwatch market.

Why Samsung is right to bypass Google Wallet for LoopPay

Don’t look now, but there may be discontent between Google and one of its key Android partners: again. On Friday, the Wall Street Journal reported growing tensions between Samsung and Google.

It’s not the first time we’ve heard that the relationship is strained. So what’s the latest issue? Samsung’s purchase of LoopPay, which gives it a mobile payment platform of its own.

LoopPay Card Case Transaction

Although neither company would likely admit publicly to any friction, there’s plenty of reason to think it’s there.

Google was reportedly not happy when Samsung decided to use its own Tizen software to power smartwatches, for example. Samsung later added Android Wear options to the marketplace but pushed forward with its own Tizen phone in December to further break away from Google’s handset control. Surely Samsung wasn’t pleased when Google bought one of its partners in Motorola, even though the company put out canned statement supporting [company]Google[/company].

And now we have the LoopPay deal, giving Samsung its own mobile payment platform even though Google has Wallet available for Android partners.

Google Wallet

I can see why Google might be upset, particularly since Samsung has no obligation to offer LoopPay to its peers in the Android device market, Google gets no payment data from LoopPay transactions, and because LoopPay already works with an estimated 90 percent of all card payment terminals. The product uses magnetic fields to send card data from a phone to replicate the information stored on the magnetic stripe of a credit or debit card.

Here’s the thing: I don’t blame Samsung in this case one bit.

Google itself could have bought LoopPay and made the technology available to all of its Android partners at any time in the past. Instead, it’s been working on Google Wallet for several years but from the outside looking in, and it has been an inconsistent effort that has faced several roadblocks: Lack of worldwide support, new terminals needed and carrier pushback along with competing carrier payment solutions, for example.

Image: Softcard

Put another way: Why shouldn’t Samsung be looking out for itself if Google’s own Wallet product isn’t widely adopted, isn’t well-known by the Android phone users and isn’t marketed well? If Google really wants to rally the troops with a common mobile payment system, it needs to evolve Wallet, something the Journal said it will do this year, possibly even paying carriers for Wallet to be prominently displayed on Android phones.

Regardless of Google’s plans to put Wallet back in the spotlight, there’s no guarantee that Samsung will be in a better position later this year. Spoofing the magnetic stripe of a credit or debit card will work for now, but how will Samsung handle the coming transition to smartchip or EMV payment cards in the U.S. later this year? It’s too early to say, but LoopPay has told my colleague Kevin Fitchard that it has already started talks with banks to firm up support and partnerships for EMV payments, for which it has a solution in mind.

As critical I can be towards Samsung for creating a dizzying array of confusing product lines combined with cramming too many features in devices, I have to give the company credit here. Samsung is watching [company]Apple[/company] erode its smartphone sales crown on the one hand, as it quickly gains Apple Pay adoption on the other.

Apple Pay at the register

Samsung can’t combat that with Google Wallet in its current state, so what’s the alternative to going it alone? Sure it could wait for Wallet to gain more traction but Google has had since the 2011 debut of Wallet for that happen. You can’t blame Samsung for trying to take the lead when Google has faltered in mobile payments.

2015: The “college experimentation” year of mobile payments

In November, when Dutchman Martin Wisjeimer became the first man to inject Bitcoin keys inside his hands, he captured the spirit of payments in 2015. Will others be crazy enough to try this? Maybe not, but many are going to try out new ways to pay. 2015 will be the “experimenting in college” years for shoppers.

Merchants will hit shoppers with options they never had before, and shoppers are going to try it all out because … why not? Waving your iPhone 6 in front of a NFC sensor to pay for stuff is entertaining and it makes good conversation during the holidays. If your sister-in-law bought you a bottle of wine with [company]Apple[/company] Pay, I promise you’re going to hear all about it. Personally, I arrived late to a meeting the day Apple Pay launched because I was eager to test it out. When I use Apple Pay at [company]Whole Foods[/company], [company]McDonald’s[/company] and [company]Walgreens[/company], other people in line are curious to see it in action.

2015 is about experimentation because tech companies are trying to displace the old card swipe system that facilitates a huge chunk of commerce in the U.S. These experiments will have ripple effects that change the underlying mechanics, rules and alliances of the payments industry. Here’s what you can look forward to in 2015:

From beacons to payments

Retailers are salivating over beacons, and 2015 will be the year we see them used here and there. Combined with a mobile app, these internet-connected, Bluetooth-enabled devices allow retailers to push location-based offers, collect data about how people navigate their stores, and link data from in-store purchases with online purchases in order to make personalized recommendations — just the way [company]Amazon[/company] does.

If you’re in the dental hygiene aisle, beacons can detect this and send electronic toothbrush discounts right to your phone. If you’re due to renew a prescription, beacons at a pharmacy could send a reminder the moment you walk into the store. If retailers use beacons tactfully, they will boost sales and pave the way for integrating payments into mobile apps. [company]Starbucks[/company] has gone that direction and many retailers will follow.

New checkout methods

Most shoppers with an iPhone 6 will try out Apple Pay, but the experimentation won’t stop there. [company]PayPal[/company] in-store, [company]Google[/company] Wallet, Alibaba’s Alipay, Coin, Current C and dozens of other checkout technologies will be tested (or re-tested) in 2015. Stratos, a company trying to build an all-in-one credit card, found that 30 percent of U.S. smartphone owners plan to use a mobile payment offering during the holidays. Consumers don’t necessarily find mag-strip credit cards inconvenient or lacking, but the sheer variety of payment technologies and accompanying buzz create a “cool” factor that adds social pressure to try them out. Didn’t I say this will be “college” for the payments industry?

“Card not present” rates will converge with card present rates

Visa and MasterCard set the rules on card processing, and currently, they charge a higher rate when consumers buy online. These Card Not Present (CNP) rates face some gray areas now that people can pay online and in-store at the same time. Say a restaurant guest uses [company]OpenTable[/company] to pay for the meal: Should the transaction face a higher rate even if customer is present in the restaurant?

With the lines of CNP blurring, [company]Visa[/company] and [company]MasterCard[/company] will have to somehow address or eliminate the rate disparity in 2015. Otherwise, they will lose ground to Merchant Customer Exchange, a consortium led by Walmart that is trying to fight back against Apple Pay, Visa and MasterCard with its own mobile payment system, CurrentC, which could save retailers billions in transaction fees.

Social payments will find a purpose

Twitter and Facebook are in the process of launching payment services, and in 2015, they will figure out how to make them profitable. Initially, Twitter and Facebook Messenger will feature peer-to-peer payments, but both companies must know that the real jackpot is serving merchants. They could take a “social commerce” approach and let people complete transactions from branded pages, posts and tweets instead of linking people to external websites. Like Visa and MasterCard, [company]Facebook[/company] and [company]Twitter[/company] could take a cut of each transaction. Shortening the gap between discovering and buying products would probably raise conversion rates for merchants and finally give the social networks a chunk of the e-commerce pie.

The upside to “experimenting in college” is that anything can happen in 2015. By the end of the year, I believe we’ll see an even clearer division between a pro-credit card group that partners with Visa and MasterCard, and an anti-credit card camp that tries to overturn their dominance in the payments industry. The current tension between Apple Pay (pro) and CurrentC (anti) is just a taste of what’s to come. Individual merchants, payment technologies and social networks will all have to figure out how to navigate this divide.

Ralph Dangelmaier is the CEO of BlueSnap, which aims to be the payments leader in e-commerce.