Android / Samsung Pay

 Samsung Pay

It’s been a whirlwind week in FinTech, with some big news coming from the Mobile Worldwide Conference in Barcelona.

The first big announcement was Samsung with the announcement of Samsung Pay. Samsung clearly doesn’t want to be left out of the revenue stream, or have its phones stand out (vs. Apple Pay on iPhone and Apple Watch) for lacking a key feature.

Although Benedict Evans didn’t comment on the functionality yet, so I’ll have to wait for a A16Z podcast on what all these mobile payments developments mean from a mobile ecosystem perspective (but I liked his retweet of the following summary):

Smsung S6 tweet

It seems to me while Samsung Pay is less revolutionary in the way Apple Pay is (and can be used for online purchases as well as in retail stores), it will still capture share in mobile payments by using Loop Pay’s technology that enables pay-by-phone at older US payment terminals, by making your phone (cleverly) appear to be a nearly card with a traditional magnetic stripe.

This matters since until October 2015 in the US, merchants may lag on upgrading their point-of-sale terminals to work with NFC, since until then, the rules on liability for cards without Chip-and-PIN (so-called EMV rules, for Europay MasterCard Visa) limit the merchant’s liability for fraud.

For more on Samsung Pay, there’s a video from CNET on the news at this link.

(It’s nice to hear of old-fashioned hardware innovation, so hats off to LoopPay, plus Dynamics and its founder/CEO, Jeff Mullen, who continues to do deliver amazing things with cards that mimic and dynamically rewrite traditional mag stripe. Their innovation led to a strategic investment by MasterCard.)

The other big announcement at Barcelona was the launch of Android Pay.

android pay

A key take-away here is that Android Pay is not really a traditional “product” for consumers, but rather more of a payments framework and API layer, according to Sundar Picha, the Googler in charge of Android Pay.

It also doesn’t replace Google Wallet, but Google Wallet in the future will ride on top of the broader Android Pay platform. For more information on Android Pay, there’s further detail in this week’s article in The Verge.

I’ve written in the past about the growing importance of open API’s in banking and payments, so to me Android Pay plans seem a smart strategy to me of focusing on what it takes to foster a global platform vs trying to build a product, especially in light of the differences between the Android ecosystem (open) vs. Apple’s (closed).

It will be interesting to see if Android Pay will become a major world-wide platform. I think the smart money feels the jury is still out, given past experience of Google Pay but there’s no denying fact that Android has been “kicking it”, as Morgan Stanley tech banker, Dave Chen, reminded me last year (despite recent hyper growth at Apple).

I think we will all get what we want – Apple devotees like me will be glad to use Apple’s products, while others in US and around the world get the opportunity to use Android Pay and Samsung Pay to take share from traditional payment methods.

 

The third piece of news this week was PayPal has bought Paydiant for its$280m in order to bring its QR Payment technology for retail payments to its 160 million PayPal users. There’s a certain wow factor to its solution — having used it at Money 20/20 — that’s hard to explain without completing a payment using the platform.

I’d met Jed Rice, Paydiant’s SVP of Business/Corporate Development, at Money 20/20. He tells their story well and the demo made a big difference to my understanding of the product. My tip: If you want to see what Paydiant brings to PayPal, check out the video from Paydiant (that includes a product demo). Here’s a good recap from Fortune of why deal makes sense for PayPay.

 

 

Had I known how much FinTech news coming, I might have gone to Barcelona this week, however I was glad to be here in San Francisco attending Jason Calacanis’s developer and startup-focused festival, Launch, at Fort Mason in SF. I finally got a chance to meet Peter Thiel, when he signed by copy of Zero to One.

Another event in SF was Morgan Stanley’s TMT event, which included a presentation by Adam Nash on WealthFront today. They announced that they now have $2B in assets under management.

(I’m already starting to revisit some of my earlier skepticism about the robo advisor category, especially given the recent market success and funding for Betterment led by Francisco Partners).

 

While there’ lots to report from Launch, including a few FinTech stories, I’ll save them for a recap later this week. But rather than wait, I’d like to close with a video from my favorite company at the festival, called Connect, a social media mobile app.

Check out this inspiring video on their site called Bring Social Back.

Screen Shot 2015-03-02 at 11.51.13 PM

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