Last year Apple announced its new contactless NFC-powered mobile payments system alongside iPhone 6, and it wasn’t surprising to see Google quickly follow suit and introduce (without giving away any details) the new Android Pay at MWC earlier in March. Samsung soon followed suit. Mobile payments have been around for quite sometime now, and these new additions will only help it further pick pace.
Earlier at MWC 2015, Android czar Sundar Pichai spoke about an ‘API layer’ that will allow other companies to support secure payments for Android in apps as well as physical stores.
So, Android Pay will help merchants accept credit card payments from their mobile apps and also at brick-and-mortar stores. Unlike Apple, it also plans to add loyalty points for those who use Android Pay. Google Wallet is likely to be reintroduced as a payments app, allowing consumers to send money to each other using their debit accounts.
So, it is bound to bring some big changes to the struggling Google Wallet launched in 2011 and could even become one of the biggest announcements to come from I/O. India, an emerging market with Android dominance, is important for Google, and it may well go ahead and launch Android Pay here too. However, Android Pay may not mean much to India.
Just like Apple Pay, Android Pay is likely to enable contactless payment using NFC for tap-and-pay services. The NFC chip fitted within the devices will help transmit payment information between the merchant, buyer and the bank, which should be authenticated by a PIN. We aren’t sure if Google, similar to Apple, also plans to add a layer of security with a unique code to make sure the true details are never shared with the merchant. Having said that, one of the primary need becomes an NFC-enabled device.
The Indian mobile payments market is still at a nascent stage and mobile payments has a long way to go. Considering the push that was needed to take credit card payments and internet banking mainstream, there’s a long way to go before mobile payment across merchants could become a reality. There’s also the fragmented device market in the Android ecosystem, a large population with differing needs, several regulatory constraints and multiple payments modes that go well beyond credit cards.
Considering Android dominates the low to mid-range segment, the larger chunk of the Android market in India has devices roughly priced between Rs 5,000 to Rs 15,000, and most of them do not support NFC. NFC isn’t a crucial feature that anyone would be looking for while scuttling for a device.
Nonetheless, tech innovation is a welcome. And we certainly believe getting Apple and Google to create feasible means of transacting would only bring about more financial companies and banking institutions to create solutions that cater to the needs of a unique emerging market such as India.
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