Well, if any payments news junkies went to their neighborhood McDonald’s on Wednesday hoping to be the first to use Android Pay there, they were out of luck.
Turns out that a widely reported “leaked memo” that said Google would be launching the mobile payments service at the fast food giant’s stores on that day was a big ol’ hoax. (Here’s the original report from Android Police, complete with a nicely done but apparently fake photo.)
But make no mistake about it. Android Pay is coming. Google itself said so, tweeting Wednesday that the competitor to Apple Pay is “coming soon.” And the author of that somewhat skeptical Android Police report noted that he himself had seen Android Pay placards at stores like Trader Joe’s and CVS around Los Angeles.
The third member of that NFC triumvirate – Samsung Pay — will be released in the U.S. this fall. The question then becomes: Will your credit union be ready?
Jean Nelson is. “Setting up Apple Pay was more work than I expected,” says the e-branch manager at Missoula Federal Credit Union ($419.36M, Missoula, MT). “But now that everything is set up with Visa and MasterCard and now that the groundwork has been laid, adopting new wallets will be far easier.”
Josh McAfee thinks so, too. “Since this work has been completed for the Apple Pay release and because Google’s vetting process is generally less rigorous, we forecast that Android and Samsung should be much shorter implementations,” says the vice president of marketing at Leaders Credit Union ($255.44M, Jackson, TN).
Another early adopter is USAlliance Federal Credit Union ($1.02B, Rye, NY). That credit union launched Apple Pay in April and now is researching the enrollment and onboarding process for Android Pay, according to Kristi Kenworthy, assistant vice president for e-commerce.
Android Pay and Apple Pay are app-driven while Samsung Pay will be device specific. In addition to serving as many mobile devices as possible, it’s the security factor that appeals to McAfee, too. All three payment options use tokenization — generating a single-use token instead of a static password.
“We are in a region of the country where bankruptcy filings and fraud are at all-time highs,” McAfee says. “Although enrollment in Apple Pay requires the issuer to sacrifice a portion of interchange, the fraud mitigation features of tokenizing payments are worth the reduced spread.”
I don’t believe we will be able to to dictate to our members which technology to use, rather the market will dictate to us which technology to offer.
Worth The Wait
Others are just savoring the moment. “We’re live with Apple Pay as of last Tuesday! We were on the waiting list with Apple for over a year but are excited to now offer this service to our members,” Chris McGee, vice president of IT at Del Norte Credit Union ($502.65M, Los Alamos, NM), says in an email. He cites convenience and security and says the New Mexico credit union would adopt Samsung Pay and Android Pay for the same reasons “as these technologies mature.”
Credit Union of New Jersey ($321.77, Ewing, NJ) is another new user of Apple Pay. Its president/CEO, Andy Jaeger, says the move was made to meet consumer demand while hanging on to interchange income.
“I don’t believe we will be able to to dictate to our members which technology to use, rather the market will dictate to us which technology to offer,” Jaeger says. “Our strategy is to remain flexible and offer several options during this early adopter phase of the leading digital wallet providers, so that when a consumer/member preference emerges we’re already a provider."
CUNJ and its partners in a technology-sharing CUSO named Member Support Solutions are also subscribers to yet another competitor, CU Wallet, a CUSO that will rely on PayPal-owned Paydiant as its payment engine. Tom O’Shea, president/CEO of another MSS member, Aspire Federal Credit Union ($183.15M, Clark, NJ), also says it’s about consumer choice. But it comes with a cost.
“Unfortunately we’re giving up member data and a piece of the member experience with Apple Pay and Samsung’s offering. Long term, these two won’t be in the best interests of our members or credit union. CU Wallet will be the long-term mobile wallet that supports CU values and members,” O’Shea says.
Supporting the digital wallets, meanwhile, falls to the networks. PSCU is working on all the payment options and sees some differences. Google and Samsung, for instance, don’t have access to iTunes accounts, so there’s likely to be a second level of authentication there, says Jeremiah Lotz, vice president of digital experience and payments at the Florida-based card processing CUSO.
Samsung also has the advantage of being device-specific and its purchase of LoopPay gives it the technology to let consumers use both NFC and magnetic secure transactions that mimic the traditional swipe.
Lotz says much remains to be learned about the emerging Apple Pay competitors but that a lot already has been done. “We’ve been through the tokenization process and we’re going to be ready to support the differences,” he says.