ST. PETERSBURG, Fla.—Apple Pay’s launch has led to a rash of moves within the mobile payments space that are leading to consumer confusion over payment options, according to analysts who are predicting that some convergence is in the offing.
In the wake of the debut of Apple Pay, Samsung purchased LoopPay and has introduced Samsung Pay. PayPal bought Paydiant. And Google acquired technology from Softcard, and also struck a deal with three of the four major U.S. carriers that will result in Google Wallet being preloaded onto future Android smartphones.
What has now become a fast-changing mobile payments landscape is certainly confusing for consumers and requires financial institutions to carefully educate consumers on any of the new payments solutions with which a credit union might align itself, said Cindy McGinnis, manager of digital channels at PSCU.
Comb Through Options
“It really takes some effort now to comb through exactly what it means to the end user,” said McGinnis. “Consumers are wondering what to do.”
McGinnis said it is “interesting” that each digital payment experience can be unique to a specific consumer segment.
“You have Apple Pay for iPhone users. Samsung Pay for Galaxy S6 and S6 Edge users . . . And you have Google Wallet. Things are really segmented.”
David Hall, PSCU
But all of the activity is leading to some convergence—especially around security, offered David Hall SVP of vendor alliance partnerships for PSCU.
Consolidation Happening
“We are seeing the industry finally starting to consolidate,” he said, about some of the recent purchases.
Hall said that is driving decisions around mobile payments fraud-fighting solutions, and toward use of tokenization services through Visa and MasterCard.
“The big boys are starting to align, and tokenization appears to be the standard, which is good for consumers and all of the players in the payments chain,” said Hall.