Apple and Google - back on track for the mobile wallet? The Contactless Intelligence Weekly News Review

Apple and Google - back on track for the mobile wallet?

We are back into the season of "will they, won't they?". What am I referring to? Why, Apple and the elusive NFC inclusion into one of their iPhones, of course! Last week saw KGI Securities analyst Ming-Chi Kuo speak to investors about his predictions for Apple's future product roadmap. Investor analyst predictions are sometimes more akin to wish lists than factual information but Kuo has a good track record of actually getting things right; the Retina MacBook Air, improved Apple TV, iPad with Touch ID and an iWatch launch later this year. But what caught our eye was his prediction of NFC inclusion in iWatch and the new iPhone devices.

As readers of Contactless Intelligence will know - we have never been afraid to make it clear that we thought Apple may have been missing out on a trick in NFC. No matter how slow the market may have been in taking off - ignoring it completely was never really going to be a sound strategy. Apple introduced the idea of iBeacons BLE technology last year, which could replicate the payment functions of NFC and support for the other tech would mean broad compatibility with existing hardware that more and more merchants have now been adopting with their in-store point-of-sale systems. Both types of technology are still not in the mass adoption stage, but NFC is clearly further along than BLE.

It's been no secret that Apple is interested in the idea of a mobile wallet on their iPhone. After all, they have their iTune accounts already in place giving them an instant network of over 600 million users with credit card information on file. And with NFC, Touch ID could be used to authenticate those payments, or even to authenticate identify for store loyalty or other purposes, too. We normally hear something on the latest iPhones around the late spring/early summer months so we shouldn't have too long to wait.

Another player in the mobile wallet market that has been quiet (very quiet) recently is Google with their mobile wallet. So quiet have they been that some commentators thought it was the signal of a long, slow withdrawal from the wallet market. However, we can say that those thoughts have been laid to rest as of last week. cNet reported last week that Google Head of Payments Ariel Bardin told the audience during his presentation at the Electronic Transactions Association's Transact 2014 trade show in Las Vegas, that the company isn't giving up on Wallet or the mobile payments market. "We have been doing this for a while and we'll continue to keep doing this for a long while." He acknowledged the slow consumer adoption of Google Wallet, but highlighted the company's nearly 15-month-long evolution of the product, which now has expanded beyond Google Wallet's initial reach. And the key to Google Wallet's transformation has been the cloud. "We started out with Google Wallet, which equaled NFC. We still do that, but now we offer many different types of payments and services," Bardin said.

Google has revamped their mobile wallet. It still uses NFC for the tap and pay functionality, but it now uses HCE to store card information. "The technology we initially used relied on hardware," Bardin explained. "And there were a bunch of hurdles to get it out the door using that approach. So we asked ourselves if we could emulate the secure element in software, and make it a core service in Android." That is exactly what the company has done. HCE is now included in Android 4.4, Google's latest version of Android software. With this new approach, Google has opened up NFC to any developer. Because the technology is built directly into the operating system software it not only works with Google Wallet, but it can also be used by other app developers that are building applications for Android. "Now anyone in the audience could build an app that leverages the tap-and-pay functionality," Bardin said.

In fact, everyone seems to be doing what they can to encourage mobile payments at the moment. Lasts week saw Finnish operator Elisa start selling stickers at popular convenience store R-kioski in an attempt to drive the popularity of mobile payments. Users can purchase the rechargeable stickers and attach them to their handsets, so broadening the reach of the operator’s wallet service beyond NFC-based smartphones. The stickers are enabled with MasterCard’s PayPass technology so are widely accepted at many retail outlets. I see this as another example of MNOs who really don't want to give up on NFC - and with good reason. Hopefully, Apple will indeed introduce NFC in the next iPhone and so encourage further NFC adoption. I look forward to the day when we can turn to each and say, "Remember when we used to place stickers on the back of our phones?… What were we thinking? …"

I couldn't end this weeks editorial without mentioning to all that the Industry Choice Award ends this coming Thursday. By Sunday evening we had just shy of 50,000 votes since last Monday. Not bad, but we still have another 4 days to go -  so, if you haven't motivated your supporters to vote - you still have time. The link is here, so what are you waiting for?

We are taking a short break this week so no Weekly News Review next Monday. Normal service will be resumed on the 28th April.

Steve Atkins
Contactless Intelligence