The Race to Mobile Payments – Spotlight on Top 12 Digital Wallets [Infographic]

Are you dizzy keeping track of all the mobile payments announcements? Its seems like every other day a new company throws its hat into the mobile payments arena – from Apple Pay, Android Pay, SamSung Pay to coming soon LG Pay, Chase Pay, and Walmart Pay.

These digital wallets share one common feature – instead of swiping a credit or debit card, you hold your smartphone up to the payment terminal to pay. Most offer tokenization services that substitute a user’s card details by generating a one-time dynamic code for each transaction with random numbers to reduce the risk of fraud. For the average user, the differences are slight. Q INSIGHTS latest Infographic highlights what you need to know. For more details read on.

2015 Q INSIGHTS Mobile Payments Infographic

1. Apple Pay

Apple Pay debuted more than a year ago in the U.S. Consumers can pay in an app or by tapping their iPhone at store terminals. While adoption of Apple Pay has been slow, overseas in the U.K. where it was introduced in July 2015 take-up has been faster partly driven by merchant acceptance of chip-based cards that are compatible with Apple Pay’s technology.

Apple is now seeking to spur expansion by introducing its service next year in China, Hong Kong, Singapore, and Spain. Interestingly, Apple is conducting a pilot program with Starbucks, which has its own mobile payments app to accept Apply Pay in U.S.-based Starbucks stores with plans for full rollout in 2016.

How it works: To pay, just hold your iPhone near the contactless reader with your finger on Touch ID. Or you can double-click the Home button when your iPhone is locked to access the Wallet, select the card you want to use, scan your fingerprint and make your purchase.

Pro: Its significant brand recognition facilitated Apple Pay’s entrance into the U.S. market. Apple Pay is the most used mobile payment service by far due to its early mover advantage. It’s also versatile and can be used both in store and within certain apps, which has helped adoption rates. Given its edge Apple has the potential to dominate and define the space.

Other attractive features of Apple Pay is its enhanced security on Apple devices. All payments must be confirmed using its Touch ID fingerprint scanner (or passcode). Apple provides additional layers of security by anonymizing credit card details, also known as tokenization when a card is first registered with Apple Pay. During the payment process, Apple Pay transmits a transactional specific security alias code, or “token” generated from the Device Account Number within the Secure Element on the mobile device.

Con: The mobile payment service only works with Apple devices with NFC technology, iPhone 6, iPhone 6 plus, or newer and the Apple Watch. This means that Apple Pay can only be used at the 1.5 million tap-based enabled stores in the U.S. Another disadvantage to merchants are that they are unable to collect consumer information for personalized marketing.


2.  Android Pay

While Google (now Alphabet) has had a bumpy ride in mobile payments, Android Pay has the potential to give Apply Pay some serious competition. Android Pay is Google’s second incarnation in mobile payments. Originally the mobile payments service was unveiled as Google Wallet four years ago.

To better compete with Apple Pay, Google acquired SoftCard in February 2015— which was briefly known as Isis, but later changed its name — a mobile payment system backed by T-Mobile, AT&T, and Verizon. In combination with the Softcard acquisition Google created Android Pay, divested Google Wallet, while developing a clear, more user friendly interface. Meanwhile the carriers backed off blocking Google’s foray into mobile payments so that it wouldn’t just be Apple’s market.

How it works: To make a purchase with Android Pay, unlock your phone with a PIN or passcode, place it near a contactless terminal, enter your passcode, then tap and pay.

Pro: With Android’s dominance in the smartphone operating system, specifically in the developing market it has the opportunity to grab a major stake in the global payments ecosystem.

Android Pay works on any Android device with NFC capability.  Like most mobile payment offerings tokenization is a key security feature. Tokens are generated in the cloud via Host Card Emulation (HCE). In the future Android Pay will support biometric sensors, including facial recognition and fingerprint. An added advantage of Android Pay are the loyalty points that you can collect and redeem at checkout with select merchants, along with the rewards tracking within the app. Like Apple Pay, Android Pay can be used to buy beyond brick-and-mortar stores to purchase goods within apps.

Con: Given the larger Android community it increases vulnerabilities and differing user experience. Also Android Pay is limited to specific next generation devices. In-store use is also tricky. With a low number of businesses that accept mobile payments it requires shoppers to visit the same place on a consistent basis to be a frequent user. Lastly HCE complicates matters. Without cell service you could be out of luck when making a purchase. If you’re without Internet and need to use Android Pay, the app will tap into a limited number of stored tokens on the device, since the phone needs to retrieve the tokens from the cloud.


3. Samsung Pay

Another high visible mobile payments entrant is Samsung Pay. Following its unveiling in South Korea, a month later Samsung quickly rolled out its mobile payments service in September 2015 in the U.S. Impressively when Samsung Pay first trialed this past summer in Korea it was able to onboard 500,000 consumers, who drove 1.5 million transactions accounting for $30 million in transactions in its first month.

Just like most forms of mobile payments, Samsung Pay will use Near Field Communications (NFC). The differentiating factor of Samsung Pay is its magnetic secure transmission (MST) technology that it acquired from its investment in LoopPay in February 2015. LoopPay’s MST technology enables its mobile devices to communicate with the mag stripe readers of legacy point-of-sale payment terminals.

Samsung has big ambitions for expansion with plans to go head to head with Apple Pay in 2016 with scheduled rollout in the UK, China and Spain.

How it works: To make a payment you swipe up to launch the app, secure with your fingerprint or four-digit PIN, and hover over the card reader to pay.

Pro: A key advantage of Samsung Pay is that it is more versatile than any other mobile wallet currently on the market. It is able to work with magnetic stripe technology in addition to wireless NFC (near field communication) technology. The dual tech means Samsung Pay is compatible with most existing and new terminals and can be used at most retailers in the U.S. An added advantage for Samsung is that Samsung devices make up 65% of the market share that use the Android operating system.

Key security features of Samsung Pay are digital tokenization along with fingerprint sensors (or passcode) for authentication.  An additional layer of security Samsung offers is if the phone is ever lost, the Find My Mobile (FMM) function allows users to remotely lock Samsung Pay or wipe all card data for even more protection.

Another neat addition to Samsung’s offerings beyond storing coupons, tickets, and boarding passes are its prepaid card capabilities. Samsung has partnered with Blackhawk Network, a pioneer of prepaid gift cards, to offer gift card support for Samsung Pay from 50 retailers as of this writing. Users can buy gift cards for themselves or gift them to family and friends directly from the app.

Con: Samsung Pay is compatible with limited cards, carriers, and devices. It will also work with Samsung’s Gear S2 smartwatch, but only for transactions that use NFC.


4. Starbucks

An early pioneer of mobile payments, the coffee giant launched its mobile payments service in 2009 in 16 stores as an extension of its gift cards, with customers reloading funds as they dwindled. It was so successful it rapidly expanded the program nationwide. The coffee company now lets customers store credit cards on its app and use them to pay, as well as tip a server. Mobile payments account for 21 percent of all in-store transactions in the US according to the company in October 2015.

Starbucks continues to innovate. CEO Howard Schultz has made mobile payment a top priority, even suggesting late last year that Starbucks’ digital stored-payment cards could become a broader currency that could be used to buy at other retailers. Earlier this year Starbucks rolled out nationwide its Mobile Order and Pay service that allows ordering ahead and picking up beverages and food without waiting in line. As part of this broader strategy, Starbucks is connecting with digitally-focused companies such as Apple, Spotify, and Lyft. One such partnership is with Postmates where customers in Seattle can order and pay for Starbucks delivery using the app as part of a trial delivery program. Starbucks has also signed deals with Spotify, the New York Times, and Lyft in which the companies purchase Starbucks “stars” that they can then use to incentivize membership and ridership in its effort to expand beyond the coffee industry.

How it works: To pay with the phone, users select “touch to pay” and hold up the QR code on the mobile device screen to the 2-D scanner at the register.

Pro: Starbucks has one of the most successful retail loyalty programs in the US growing 32%, year-over-year based on its October 2015 Analyst call. With a payment system that allows customers to earn rewards relatively quickly, it is easy to get customers hooked on the chain’s loyalty program.

Con: Starbucks is limited use at one retailer at the moment. Currently the app doesn’t include tokenization as a security measure like the majority of the mobile payments players in the U.S. today.


5. PayPal

A leader in the digital wallet space, in 2013 PayPal revamped its mobile app to better focus on the retail experience. The wallet feature lets people pay with a PayPal account, a credit or debit card, bank account or a line of Bill Me Later credit that can be applied for within the app. The PayPal app also integrates ordering ahead and paying for purchases before you pick them up, paying at the table at a restaurant, incorporates deals and discounts that are then automatically applied when you pay, while continuing to take advantage of the original digital currency transfer capabilities.

In March 2015 PayPal announced the acquisition of mobile wallet maker Paydiant in order to compete with Apple Pay. Paydiant is the developer behind mobile wallet technology that’s inside of apps from Subway, Capital One, and — most notably, the consortium of major retailers known as MCX, and its mobile wallet app, CurrentC. This means that PayPal will be the backbone to some significant initiatives.

How it works: PayPal works in different ways at different venues. In some locations PayPal allows users to pay at the point of sale by entering a PIN and a mobile number on a terminal with merchants PayPal has a direct relationship. Alternatively, shoppers can present to the merchant a QR code generated by the app.  Elsewhere, the shop section of the mobile wallet can be used to switch between payment methods for a particular transaction (e.g., a PayPal account, bank account, credit card, etc.). You need to check in on the app which prompts for a PIN to unlock the wallet, after which your photo is beamed to the merchant’s POS screen or smart device. At the registrar saying “I’m paying with PayPal” will prompt the clerk to identify you by your picture and confirm the payment amount. You don’t need to take out your phone a second time.

Pro:  PayPal, the most commonly accepted digital form of payment by 40% of retailers in North America as of July 2015, can leverage its extensive user base for widespread adoption. Known for innovating security features online, like all of its online transactions, in-store purchases you make using PayPal are tokenized and encrypted.

PayPal’s Paydiant tech allows any merchant to build mobile payments, loyalty cards, and offers into their apps. It’s up to each retailer to choose which services they want to offer and how they want those services to work. It’s versatile to enable features either through QR codes or NFC. PayPal has long ridiculed NFC as “Not for Commerce,” but recently made an about face with plans to rollout NFC as a new feature of its mobile wallet based on its popular market tested mobile app in Australia. Other advantages of PayPal’s current mobile app is that it works as a native app as well as a payment application within other apps, such as the popular Uber car service.

Con: In the past PayPal hasn’t succeeded in penetrating the physical store and it’s not certain if its new efforts will breathe new life to past lackluster brick-and-mortar efforts.  Another drawback is that you also need to make sure you have cell service in order to pay with PayPal.


6. LevelUp

Since its launch in 2011 LevelUp has attracted more than 1.5 million consumers and 14,000 merchants (based on their website). The long-term strategy for LevelUp is its white-label business, earning revenue for building merchant-branded mobile wallets for businesses and fees when users unlock loyalty rewards. LevelUp even gives away their point-of-sale terminals free of charge to merchants.

How it works: Open up the app, then tap to pay with NFC or scan the QR Code on the mobile phone at the LevelUp terminal at the counter

Pro: The company offers lower flat processing fees of 2% and additional marketing capabilities to help attract merchants.  Additionally the social interaction element of the app makes it appealing. Customers can order from within the app, or order online and accrue or redeem rewards in the process. The app can also handle gift cards that can be used in-store or sent digitally to friends and family. Security is also key feature of the mobile platform with multiple layers of security including its “triple token system” according to its website. Interestingly LevelUp has integrated directly into Apple’s Wallet (formerly Passbook), making it a payment option alongside any bank cards a consumer enrolls within Apple Pay.

Con: Beyond Boston where the company is based, LevelUp hasn’t gained much traction among consumers or merchants broadly. The noise of other mobile payments systems are likely to put them further in the background. If the MCX initiative is ever rolled out, LevelUp’s broader strategy may not pan out either.


7. Current C

Driven by a desire to control their own destiny, a group of retailers representing over $1 Trillion in purchasing power formed the Merchant Customer Exchange (MCX) in 2012. While MCX, which includes Wal-Mart, 7-Eleven, Best Buy, CVS, Rite Aid, Lowe’s, Michaels, Sears, Gap, Target and many others, has been in existence for several years its mobile payments app will not launch until 2016.

These retailers seek to avoid paying credit card fees in the 2 to 3 percent range by processing payments through ACH (Automatic Clearing House) transactions via bank accounts that have much lower fees. For this reason the mobile payment product dubbed CurrentC can only be used to pay with one of three options: gift cards, a store’s private-label payment card, or their checking accounts. One exception will be Chase cards, which has made concessions on fees to make it attractive for the retailers. MCX uses Paydiant (now PayPal)’s white labeled mobile wallet system in the backend.

How it works: To pay at check out, unlock your phone, open up the CurrentC app, open the code scanner, and scan the QR code displayed on the screen. In some cases the reverse may happen where the mobile device displays the QR code and the cashier scans it. For certain locations such as at gas station pumps, CurrentC will generate a numeric code to enter on the keypad to initiate a payment.

Pro: One of the advantages is the large footprint of the participating merchant group, which operate over 110,000 retail locations. The system is designed to automatically apply discounts and use loyalty programs to deliver coupons and rewards that will provide the most value for merchants and consumers. Like many other mobile payments systems CurrentC tokenizes financial data for each transaction. For the privacy minded CurrentC also offers a visual breakdown of data CurrentC receives from users, who it can be shared with, and what data sharing is optional.

Con: QR codes tend to be clunky and not surprisingly the CurrentC app has been criticized for being difficult to use. Another disadvantage is that although most mobile payment wallets let users pay using account information from traditional credit cards like Visa, MasterCard and Amex, CurrentC will not (with currently one exception, Chase cards).

Although it has been in the works for three years MCX has yet to offer a product beyond a small beta test. In the meantime it has been leapfrogged by Apple, Google, and Samsung, which have been slowly accruing users. The delays mean facing an even more competitive market.

Also MCX retailers may be coming up on the end of their exclusivity agreements to offer other mobile payments options to consumers, which would have given CurrentC a leg up. Combined with the previous hack of CurrentC last year, the MCX initiative has suffered a series of challenges. Though it doesn’t mean the initiative is doomed, it is certainly going to face an uphill battle.


8. Walmart Pay

The world’s mega retailer, Walmart Stores debuted its own mobile payment system as a feature in Walmart’s existing smartphone app in December 2015 to limited stores around Bentonville, Arkansas, where the retailer is based. Having its own app also gives the big-box store access to shopping information that it wouldn’t otherwise have to personalize future customer experience.

Notably Walmart is a key member of the merchant consortium, Merchant Customer Exchange (MCX), which includes other retailers as Kmart, Best Buy, and 7-Eleven that has been working for the past three years to develop the mobile payment app called CurrentC (see above). Despite the launch of its own mobile wallet, Walmart says that it is still a strong supporter of CurrentC.

How it works: When checking out, customers select Walmart Pay from the store’s mobile app. They then activate the camera on the app to scan the QR code displayed at the register before scanning the items for purchase. The QR code connects their purchases to the app as the items are scanned, either at the self-checkout register or by a clerk. Following the transaction an e-receipt is sent to the app.

Pro: Walmart Pay works across varied devices, operating systems (any Apple iOS or Android) and payment types. The Walmart app can add a credit or debit card or even a pre-paid or Walmart gift card. The app has some added flexibility.  It can be set up to pay using a combination of payment types to split the payment between Walmart Pay and cash, and even add shopper’s Savings Catcher balances as a payment type. Savings Catcher is a Walmart app service that allows customers to upload pictures of their receipts and then scans those receipts to see if competitors offered lower prices on any items. If they do, Walmart refunds the difference with an e-gift card.

Further, the app is designed to integrate with other mobile wallets like Apple Pay and Google Wallet if the retailer decides to do so in the future. The most promising aspect of Walmart’s mobile payments option is its vast customer base. Walmart says it has 22 million monthly active users for its mobile app even before it integrated the mobile payment option.

In terms of security, no card information is stored on the phone, but the real card number is still stored at a secure data center. Purchases are authenticated with a 4-digit passcode (or use Touch ID for an iPhone).

Con: The process to set up isn’t as simple as Apple Pay or Android Pay. Also the actual payment transaction process is not very elegant.


9. Chase Pay

In October 2015, JP Morgan Chase jumped into the mobile payments race with Chase Pay that will launch in mid-2016. It is among a list of banks that are developing their down digital wallets to challenge the tech titans, Apple, Google and Samsung. The retailer backed mobile payments consortium Merchant Customer Exchange (MCX) is banding together with JP Morgan Chase’s newly unveiled mobile payments platform.

Chase brings a large number of potential users as the number one total credit and debit payment volume in the U.S. Chase Pay will allow Chase’s 94 million credit, debit and prepaid card account holders to make in-store, in-app and online purchases.

How it works: To pay, unlock your phone, launch the app, display the QR code, and wait for it to be scanned at the register.

Pro: Chase Pay has several advantages over some current mobile payment systems. It will work with virtually any smartphone, and be able to pay where other payments don’t always work (like gas stations and drive-through windows).

Another favorable aspect is the partnership with MCX. The arrangement means that Chase Pay will roll-out to MXC member merchants who represent over 100,000 retail locations across the U.S with $1.2 trillion in annual spending. The support of retailers’ loyalty programs in Chase Pay benefit merchants who will continue to collect customer data while also facing attractive economics –no network fees, no merchant fraud liability, and lower transaction costs. Meanwhile, shoppers won’t need to tote around their plastic loyalty cards or key fobs in order to earn points, use couples, or receive discounts.

Con: QR codes tend to be more hassle than touch-to-pay payment systems. The debut in 2016 is perceived to be late in the mobile payments battle. Also, only Chase cards are permitted, so if you’re not a Chase customer this is one digital wallet that you can’t use.


10. LG’s “G Pay,” “L Pay,” or “LG Pay” (alternative names filed in trademark application)

LG is the latest tech company to try to carve out their own slice of the mobile payments pie. Information on LG Pay remains scarce. Following the announcement of roll out of its service in South Korea LG did not reveal further plans for an international launch. They have also not offered much detail about the system, whether the initiative will allow in addition to the physical payment for goods at checkout the ability to make online purchases on the LG device.

How it works: It is expected to use NFC technology the likes of Apple Pay, Android Pay and Samsung Pay. It is also said to support fingerprint sensors for its payment services.

Pro: The launch of LG Pay in South Korea, a country that embraces new technology, will give them an opportunity to work out any kinks before it is introduced in other markets. It is also believed that LG Pay will be available on all LG smartphones, not just newer generation phones.

LG Pay may be more versatile if it supports more payment types as well. The company reportedly intends to support Android Pay with Android Marshmallow on its future devices alongside LG Pay.  LG is also rumored to potentially take a page out of Samsung’s playbook and support magnetic secure transmission (MST) technology to enable reading of magnetic strip credit cards ensuring compatibility with older point-of-sale terminals.

Con: LG faces stiff competition from rivals with more significant market share. While LG has partnered with Korea’s two largest credit card firms, Shinhan Card and Kookmin Card, discussions of integration with global financial institutions are unknown.


11. Microsoft Wallet (or Pay)

While Windows Phone has had a Wallet feature in the past (first introduced in 2012 as part of Windows 8), in October 2015 Microsoft announced plans to relaunch its Windows Wallet. The wallet is a mobile payments app that stores credit cards and coupons for in-store and online payments through Windows devices. Microsoft’s actions may be a more competitive strategy for its longer term goals rather than a pure mobile payments play.

How it works:  While details are scant the “tap-to-pay” feature is said to be a part of Windows 10 for phones and small tablets (a.k.a. “Windows Mobile”), which would support Host Card Emulation. It’s possible that not every Windows 10 device will support NFC, but those devices that do embed the hardware should be able to pay for things at the grocery store, restaurants, and other locations that accept NFC payments.

Pro: Microsoft offers added security measures based on “Windows Hello” authentication that include facial recognition, fingerprint, and iris. The wallet will also be preloaded on millions of new phones over the next few years.

Con: The wallet for Windows devices will primarily serve consumers already in the Windows mobile ecosystem, which has a considerably smaller portion of the market than Android and iOS.  Additionally, with no hard date set, it could be end up being a case of too little, too late.


12. Capital One Wallet

Financial institution Capital One debuted its own mobile payments app in 2014 for the iPhone and expanded in 2015 to incorporate Android phones. The mobile wallet is supposed to complement Capital One’s banking app. Consumers can pay in store using the Capital One Wallet at any retail location that accepts payments via Near Field Communication.

How it works: To make a payment, unlock the phone and then hold the smartphone near the NFC reader. You don’t need to open the wallet app in order for it to work.

Pro: The device does not need a cellular data connection to make an NFC payment. The Capital One Wallet app can store gift cards, and consumers can review their transaction history and manage their Capital One reward benefits in the app. The Capital Wallet app also works with Apple Pay.  Customers can add the wallet app to Apple Pay as a payment option, but Apple Pay is still the only app that can facilitate NFC-based transactions on iOS. The Capital One wallet app also allows users to collect and access various rewards and coupons.

Con: The mobile app is limited to Capital One MasterCard and Visa credit and debit cards.


This update offers highlights of major digital wallets available today or coming soon. No doubt we’ll be hearing more announcements of entrants into the already fragmented and crowded in-store mobile payment market. One notable entrant that indicated plans to join the competition is retail giant Target in December 2015. Details, however, are sparse.

Q Insights will continue to post updates. If there is any information/initiative missed, and/or new news, please share them below.


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