We have often said that payments is the new billing. We now think that it is more exciting than that. A lot more exciting. Apple Pay has caused more than just ripples in the payments pond. It was a defining moment when the biggest, most popular player finally made his move, after years of doing nothing.
Google, the other titan (not to be confused with Titan) responded by going with the company formerly known as ISIS (rhymes with crisis), now called Softcard. This was partly because their own wallet was not performing as well as they would have hoped.
Now, by actively partnering with carriers, Google just might have the team to tackle Apple.
The advantages for Google are that, whatever we thought of ISIS (not much), it was well-funded and rolling out trials across several cities. So, it is not exactly starting from scratch. The technology, too, is becoming widely accepted and underpins Apple Pay’s technology, which will help both parties. Meanwhile, although difficult to get an accurate figure, last year CitiGroup estimated that revenue from Google Play could grow from $1.3 billion in 2013 to $5.2 billion in 2017.
That said, Apple is pulling in much more and recently clocked its first $500 million week.
Carrier Billing (CB) is a ‘one click wonder’ and is becoming the de-facto ‘in-app’ way of purchasing extra items within a game. Across the world, carriers are looking at (and implementing) CB as one part of their strategy to shore up core SMS revenues which are being eaten up by Digital Service Providers (DSPs) such as WhatsApp.
The question is whether Google can take what was a solution developed by committee and turn it into a compelling, easy to use payments (and support) solution that has a chance of taking on Apple.
Ignoring carriers might be Apple’s Achilles Heel. The company has always taken the solo route, even saying ‘no’ when Microsoft came to them in the 90s with a collaboration idea (Apple’s operating system and Microsoft boxes) that would have made world domination very simple. Instead, the cool Apple nearly went bust (hard to believe now).
Apple, though, has some huge advantages. They already have the slickest and most used billing system on earth, even though it may not be the most sophisticated. A SAP utility platform that has scale, but not the normal ‘elegance’ of Apple solutions.
Apple Pay, the payments game changer, is also looking robust. Using ‘token’ technology – never revealing details to merchants, for example – it has security, safety and a cool image going for it.
Perhaps the Google/Softcard team will never give Apple a real run for its money, Apple is already too embedded. Perhaps, though, some of the 120 patents that Softcard holds might be critical in taking on the giant. Visa Europe has just announcements its launch of tokenisation in Europe, so presumably that will now be available to Google.
And that puts it in the same bracket of security as Apple.
The next couple of years will be fascinating to watch as the payments battle goes from skirmish to full scale warfare. And don’t forget Samsung, that just bought LoopPay -a combination could prove formidable to both Google and Apple Pay.
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