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Google Teams Up With 3 Wireless Carriers To Combat Apple Pay
HughPickens.com writes AP reports that in an effort to undercut Apple's hit service Apple Pay, Google is teaming up with three wireless carriers by building its payment service into Android smartphones sold by AT&T Inc., Verizon Wireless and T-Mobile USA. Besides trying to make it more convenient to use Wallet, Google also is hoping to improve the nearly 4-year-old service. Toward that end, Google is buying some mobile payment technology and patents from Softcard, a 5-year-old venture owned by the wireless carriers. Financial terms weren't disclosed but Apple Pay's popularity probably helped forge the unlikely alliance between Google and the wireless carriers. Google traditionally has had a prickly relationship with the carriers, largely because it doesn't believe enough has been done to upgrade wireless networks and make them cheaper so more people can spend more time online.
The biggest challenge however is one that both Apple and Google face: Only a small fraction of the 10 million or so retail outlets in the U.S.–220,000 at last count–have checkout readers that can accept payments from either system. Both wallets use a radio technology called Near Field Communication to send payment, and it's expected to take years for most stores to be upgraded. What's at play? The big tech companies and carriers seem convinced that our phones will eventually replace our wallets. For carriers, that could make mobile wallet technology table stakes over the next few years as they compete for consumers.
The biggest challenge however is one that both Apple and Google face: Only a small fraction of the 10 million or so retail outlets in the U.S.–220,000 at last count–have checkout readers that can accept payments from either system. Both wallets use a radio technology called Near Field Communication to send payment, and it's expected to take years for most stores to be upgraded. What's at play? The big tech companies and carriers seem convinced that our phones will eventually replace our wallets. For carriers, that could make mobile wallet technology table stakes over the next few years as they compete for consumers.
Usually purchase speed is in this order:
1: Debit card. (user swipes card, enters PIN, done.)
2: Credit card. (user swipes card, signs, done.)
3: Cash.
4: Checks.
From what I've seen at stores, people fumbling for their phones at stores is actually slower than the coupon-clipper with the checkbook.
If Google's mechanism goes via credit cards like Apple Pay, it would be useful, should I lose my wallet, as a backup mechanism. However, if it is ACH based like CurrenC... then I would avoid it at all costs, since all it takes is one bad transaction, and I'm cleaned out with no recourse.
No fucking way ... no fucking way ..
an idiot on the internet... no fucking way...
Your ordering is wrong.
The correct ordering is:
1) Cash: 15 seconds or less
2) Credit/debit card: 45 seconds or more
3) Smart phone: 1 minute or more
4) Checks: 2 minutes or more
"The biggest challenge however is one that both Apple and Google face: Only a small fraction of the 10 million or so retail outlets in the U.S.–220,000 at last count–have checkout readers that can accept payments from either system."
That's not the biggest challenge. The biggest challenge is that it is no more convenient or reliable to pay a bill with my smartphone than it is with a credit card. My credit card doesn't run out of power. And I don't have to worry about it not getting a good connection inside a store. And I don't have to worry about pulling out a $500 phone and juggling it around every time I want to pay for something.
By Oct 2015 most banks will be issuing smart credit cards that make it much harder to commit fraud. Some of them will come with NFC and support "tap to pay' just like a smartphone. But they will be much cheaper and much more reliable.
Paying by smartphone is a solution in search of a problem.
My experience:
1. ApplePay, when the store has implemented it right (about 2 seconds, hold up device, done)
2. Debit Card (about 20 seconds to swipe and enter pin)
3. Credit Card (about 30 seconds to swipe and sign)
4. Cash (about a minute to make change)
5. ApplePay, when the store has implemented it wrong, and required the user to fill in a form on the terminal.
6. Checks.
The correct ordering is:
1) Cash: 15 seconds or less
2) Credit/debit card: 45 seconds or more
Most of my transactions are at self-checkout kiosks for either groceries or gas. Swiping a card is much faster than fumbling with cash. If the transaction is under $50, the kiosk doesn't even ask for a signature, it is just swipe and go.
Apple doesn't bypass the credit card companies - you're thinking of CurrentC (the joint system being developed by Walmart, CVS, etc.). That system exists solely to save merchants money. ApplePay uses the same credit card system (and your existing cards) to make payments.
I get so sick and tired of seeing people use some sort of a card or device to pay for small purchases. It's never as quick as cash is.
Perhaps its because of where you live? Where I live, chip and pin is ubiquitous, and tap (e.g. "Visa PayWave") is starting to become very common.
Tap is the fastest by far.
Chip and Pin is next.
Cash is next after that.
When other people pay with credit card or debit card or their phones, it ends up taking at least 30 seconds,
Apparently you've never seen Visa PayWave in action.
If somebody can't find their card right away,
Yes, that's a problem that only happens with cards. Nobody has ever not been able to find their cash right away. It has magic properties such that a $20 note is always in the pocket you expect it to be... while one's cards move around like ninjas.
or if they forget their pin, or if the terminal can't read the card, or if the transaction fails, [...] If the person had just paid with cash, we'd have all been on our way already!.
Or if they forget to bring enough cash, and find themselves a couple bucks short, or they'd go rummaging around for exact change so as not to break a 20, or they find exact change after the cashier has already started counting them change, or they use the cashier as a change machine and start asking her to trade fives for singles or break 20s into fives... and then the cashier has to be very careful, maybe even call a manager because she's worried she's being scammed and wants to have a second set of eyes to make sure everything adds up right. Or the cashdrawer can run out of something, and your waiting for a manager to go get some more from another cashier or the safe.
I've spent LOTS of time waiting in line for people doing stupid things with cash. Moreso then cards... especially now with stuff like paywave.
Phones don't seem to be faster though; getting the phone out, signing in, finding the app, etc... takes longer than it should. I think cards aren't going anywhere for a while yet.
Last year, Softcard bribed me - cash, Amazon gift cards, etc. to use their service.
This year, they stopped, and I went back to swiping my credit card.
The problem is that Softcard payment requires more steps than you think:
1) Unlock phone
2) Open app
3) Type in 4-digit pin (why can't I use my fingerprint?)
4) Tap
Also, the tap is not as easy as you think. The first time you do it like the video, it probably won't work. On my S5, the sweet spot is actually in the middle of the phone horizontally across middle of NFC reader, and once I figured that out, I usually succeeded on the first try. However, some card readers just suck and will frequently require multiple tries. Rite Aid card readers, before they stopped accepting it, were the most likely to have this problem (and it was always the same ones at particular registers that gave me trouble).
The way it SHOULD work is that I put my phone over the NFC reader, it asks me for fingerprint, and done. Reality bites.
Your ordering is wrong.
The correct ordering is:
1) Cash: 15 seconds or less
2) Credit/debit card: 45 seconds or more
3) Smart phone: 1 minute or more
4) Checks: 2 minutes or more
What kind of lame POS system does your coffee shop have? When I go to Starbucks or Peets, it takes me the same amount of time to hand over my card as it does to hand over cash, the difference being that it literally takes them only a second to swipe it, and by they time they hand it back to me, the transaction has already been approved, no signature required.
I don't see how cash could possibly be faster unless I hand them exact change, but even then they still have to count the bills and put them in the drawer, so even if *my* transaction is faster, the next patron has to wait.
I was visiting the USA (California is nice this time of year) last week and I had to sign little pieces of paper with my name to buy things with my credit card. Apparently none of the stores and restaurants have chip and pin terminals. You can't prevent even the most basic fraud if any guy with a card reader can make a copy of your magstripe and clone your card. What's worse, in the restaurant they actually walked off with my card, instead of bringing a wireless terminal to my table for me to enter my PIN. You good people are about 5 years behind the times. WTF happened?
None of them can see the clouds; The polished wings don't care.
I have no idea why I'd want to use my phone instead of a card.
There is also some potential increase of security:
Unlike (nearly) every card(*), the phone is a device that has its own display and input interface.
Meaning that you don't need to trust the payment terminal(**).
- No risk of skimmer trying to read you PIN: you're typing it into your own phone, not on the terminal which could have been hacked/modded.
- You can trust the amount displayed (again, you are reading your own phone's screen, so even if the terminal is hacked to display a lower sum and actually bill a higher sum, you'll notive the discrepancies).
Also, the phone has connectivity, which allows out-of-band confirmation for the transaction (***).
Thus, the device is protected against fraud that could menace a classical card.
- hacked terminals showing bogus transaction amounts, or trying to record your PIN.
- hackers trying to relay a transaction (small amount are "tap/swap only": no signature neither PIN asked. It's possible to use a powerful antena pointed at a wireless credit card to remotely use it and relay communication to a terminal).
Saddly, the phones have their own problems:
- they eat batteries like candy (even wireless credit card transaction are remotely powered by the terminal. Whereas a dead phone is dead and can't be used for paying).
- again, they are conencted. Which means that they could be compromised themselves. (Specially since people tend to install tons of crap).
-----
(*): I've seen banks issuing cards used for e-banking that have a build-in screen and keypad. Similar devices are in theory possible on a credit card.
(**): lots of e-banking card reader do exactly that: you can check on the screen what you are asked to sign.
(***): That's a security feature that's also offered by combining classical credit cards and separate connected device. I can be asked to confirm by SMS / by voice call when the bank detects unusual traffic on my credit card.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
You young whippersnappers have so little appreciation for the value of technology. At the pharmacy, I can do a tap-the-terminal NFC payment faster than you can use cash, and with no annoying change to carry around. It navigates me to the early bird special at the diner. It remembers every doctor in town for me. I can make the print in the Kindle app as large as I need when I'm reading books. It can track annuities of any complexity the brokerage can throw at me. It schedules my HOA meetings and lets me get high-res video of the kids on my lawn.
I worked for an auction company for a while. We auctioned a lot of farm equipment, tractors, and cars. More than once I saw people roll in and pay absurd amounts of money in cash for things. These people weren't drug dealers. Some people just don't do checks or credit cards.