The War for Mobile Payments: Ready, Fire, Aim!

First there was PayPal, which wasn’t really mobile at all, but did allow small merchants the ability to take credit card swipe payments at a nice discount. Then there was Google Wallet, which never really took off. Last fall, Apple Pay was the first easy-to-use and secure mobile payments option — but only in the US, only with certain banks, only with merchants with NFC readers, and only for owners of iPhone 6 and 6 Plus. Apple Pay is accepted by more and more banks and merchants, but is still limited to the most recent iPhones (and next month, to Apple Watch wearers).

But if you think all that is disjointed, just wait until you see the news from the last two days.

Samsung announced yesterday its own Apple Pay rival called — no shocker here from our South Korean copycat friends — Samsung Pay. Samsung Pay (initially available on the new Galaxy S6 and S6 Edge) will rely on the company’s purchase of mobile payment system maker LoopPay, which is a bit more convoluted and less secure than Apple’s method. Rather than a secure and anonymous code generated unique to each transaction, Loop Pay “broadcasts” your credit card number — in the clear, mind you — to the merchant’s card swiper. That’s fine and dandy for merchants who won’t quite yet have to upgrade their hardware, but it might prove a tough pill to swallow for consumers.

Samsung’s smartphones of course run Google’s Android operating system, so the South Korean giant might find competition right there on their own phones. That’s right: Google is set to announce yet another mobile payment system, perhaps to be called Android Pay. Phandroid reports:

Google’s Sundar Pichai spoke at Mobile World Congress in Barcelona this morning about the company’s plans for mobile payments in the future. This comes at a time where Apple and now Samsung have thrown their hats into the arena with exciting platforms of their own.

Google Wallet in the now slightly pales in comparison to those guys, but Android Pay will hopefully look to change that. The first thing to know is that Android Pay won’t actually replace Google Wallet.

So Android Pay won’t replace Google Wallet, even though Google Wallet never really caught out outside a dedicated core of users. Instead, Android Pay will perhaps be another layer on top of Google Wallet, while also sitting alongside it on your phone. I’d suggest keeping it (or both of them) on a separate app page from Samsung’s offering, just to try and reduce the confusion level.

On the other hand, Android Pay might necessarily elevate the confusion level, if this Yahoo report is correct:

Google has been attempting to get consumers to ditch their cards and use a smartphone to pay for goods in physical stores since the start of the decade with its Google Wallet app. However, what makes Android Pay different is that it will be a feature that any app developer will be able to integrate into their titles for automatic wireless payment support.

In other words, developers may gain the ability to stuff your virtual wallet with more crap than already collects in your real-world wallet.

It’s unwise to simply dismiss any Google project before it has a chance to get off the ground, and certainly before it has even been demoed. But neither Android Wallet nor Samsung Pay look like the kinds of mobile payment solutions consumers are clamoring for, certainly not at this stage of their development.