Category: Top Stories


The launch of Apple Pay may have been the most impactful announcement of any tech firm last year. The tech titan with the Midas touch and customer experience extraordinaire will finally make mobile payments work where so many other have stumbled. I will finally be able to leave my wallet at home and transact anywhere I want with my (ever bigger) smart phone. Great!!

Well, great that is if you are an Apple iPhone user. But if you are like me and roughly 51% of smart phone users in the US, you have no access to Apple Pay because you have an Android phone.

This is a major problem for banks joining Apple Pay. As a bank, you want your mobile services to be available to 100% of your customers. Just imagine providing remote check deposit functionality to only your iPhone users and none to your Android users.

The scale of the problem is even bigger on a global level. According to the research firm IDC, 85% of smart phones shipped globally in the second quarter of 2014 were running Android. And that market share is up considerably from 80% at the end of 2013.

So, where is my Android Pay?

Android is no iOS

Kaushik Roy

You would be hard pressed to find a mobile payment solution that will fill the needs of banks and merchants on the Android ecosystem. The Android platform’s own “open” nature makes it almost impossible for a single wallet to dominate the entire market. Just ask Google! Google Wallet, launched in 2011, has struggled to gain traction after being blocked by most mobile phone operators out there.

The Android open ecosystem provides a level playing field for all players. Banks, merchants, tech companies, mobile operators and OEMs each can develop their own application for payment running on Android. That may make development slower, as no single entity can push a solution for all, but can also generate innovation and exciting user experiences with more players trying different approaches.

The underlying technology is there

Funny thing is that there are actually a lot more Android devices equipped with the same Near Field Communications (NFC) technology that allows for Apple Pay style proximity payments. IHS Research estimates a total of 420 millionNFC-enabled devices to ship in 2014, the great majority of them Android smart phones.

Also, most of the same infrastructure banks are using to enable Apple Pay, the card provisioning and tokenization services could also be used with small modifications to enable Android Pay.

There are also plenty of technology options for banks to store their precious credit card data on the phone. From the same “secure element” chips Apple uses, to new cloud-based storage using a technology called Host Card Emulation (HCE), there are plenty of solutions that banks can rely on. What was missing is a strong motivation to move forward and face the challenges. And once again, Apple provided just that.

What will Android Pay look like?

First of all, there probably won’t be an “Android Pay.” The incredible distribution of power between the players in the Android ecosystem ensures there will be multiple solutions for payments in Android. Google Wallet will be just one of them. But the ones that seem to have the most to gain from Android’s openness are the ones that already have apps in my phone.

Today I already have dozens of apps in my phone. These keep being updated with new functionality. Why couldn’t I just get an update on my banking app and have payment functionalityadded in the same way check deposit was added? Why not add payment functionality to my Home Depot or Macy’s app instead of having to sign-up for a brand new app?

Your App is your Wallet

These apps with payment capability will revolutionize the concept of a “wallet.” A branded app with payment capability will become about a lot more than just payment, it will be all about consumer engagement and loyalty. After all, what is the most successful mobile wallet of all times? The Starbucks App.

On October 31st Starbucks revealed that it handles 16% of its U.S. sales through its mobile app. That represents over US$ 1.3 Billion in transactions via its own mobile app.

But more than that, Starbucks turned their app into a priceless repeat use channel of communication with consumers. Starbucks leveraged this customer touchpoint to integrate loyalty and offers into the same mobile app to create an excellent all-around consumer experience.

Banks and merchants realize that the Android ecosystem provides an opportunity for them to duplicate Starbucks’ mobile app experience. By powering their apps to become wallets they can manage their brand and user experience from beginning to end and create loyalty with consumers through their own mobile apps.

Bottom line? Android Pay will look like the apps you already have on your phone —only now these apps will be able to pay anywhere you go.

About the Author
Kaushik Roy is the SVP of Product at Sequent. Kaushik brings two decades of experience in defining and delivering large-scale enterprise software applications. He is also the co-author of several patents for mobile payments, NFC and process management technologies