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11.6 Mobile Payments 351

collection. As of 2015 (Statista-2 2016), around 13% of Enablement Service and the Digital Enablement Express
smartphone users in the USA were active users of these sorts programs and supports their vision to enable virtually every
of proximity payments. In that same year the total value of device for commerce.
these transactions was about $27 billion. By 2019 this figure From a technology standpoint, a key partner is Coin.
is projected to (magically) climb to $210 billion. Currently, the primary product that Coin provides is a com-
It will require extraordinary growth (a sevenfold increase bined EMV and NFC compliant smartcard called the Coin.
in a 4 year period) in the number of installed NFC readers The smartcard holds information of all the credit and debit
for these estimates to pan out. Thus far, many merchants cards that the card owner wants to use for purchases. A com-
have been hesitant to install the readers. Part of this hesi- panion smartphone app is used for initial setup and for add-
tancy is due to the fact that while NFC is a standard, there is ing and changing cards. Given its combined EMV and NFC
still disagreement about the specific handsets, chips, readers capabilities, purchases can be made with the Coin card by
and networks to be used. A case in point is the Google swiping, tapping, or waving like other EMV or NFC smart-
Wallet. Originally, Google Wallet had a fixed set of opera- card. The advantage is that the Coin eliminates the need to
tional partners (Sprint, Citibank, MasterCard, and FirstData), carry multiple cards or even a smartphone. The Coin card
and was available only on the Sprint Nexus S 4 G handset, provides the means to switch from one card to the next
supporting two credit cards (Citibank MasterCard Paypass depending on the owners’ preferences at the time of
terminals and Google Prepaid cards). Then they shifted to purchase.
MasterCard and MasterCard PayPass terminals. Just Initially, Coin was solely focused on using the technology
recently, they turned Google Wallet solely into a P2P appli- for their own card. With the MasterCard partnership they
cation and shifted general purchasing to a newer wallet have expanded their horizons and plan to provide other com-
called Android Pay, which operates on both Android and panies with their Payment of Things hardware and software
Apple smartphones. This is simply another example of the platform (Cipriani 2016). This will enable these companies
“chicken-egg” problem (Section 11.1). to embed Coin’s smartcard payment capabilities into these
It is also an example of another reason why there is hesi- devices. The fact that the partnership is nonexclusive means
tancy to adopt a particular NFC configuration because the that Coin’s platform will eventually be available to compa-
mobile payments field is changing so fast that there is no nies affiliated with the other card associations.
assurance that the current form of NFC proximity payments
won’t be supplanted by some other technology. A good case Cloud-Based Digital Wallets
in point is the diminishing role of the integrated (payment) An alternative to device-based mobile wallets is cloud-based
chips inside smartphones. These chips were used to bolster mobile wallets. The infrastructure for these wallets is not as
security. However, they only worked with specific readers. onerous as a system based on NFC. Basically, a customer
Today, wallets like Apple Pay and Android Pay store card enrolls his or her card with a secure Web service. Requests
and other information on the phone, not in a chip. During a for payments are made to the service and charged to enrolled
purchase, card information is not transmitted to the reader; card(s). In this way no card information is transmitted during
instead a secure numerical token (one-time payment number a purchase. Instead, transactions are initiated by scanning a
and dynamic security code) is generated and transmitted. barcode or Quick Response (QR) code created specifically
This opens up the number of types of readers that the mobile for the customer and stored and displayed on the smartphone
wallet can work with. by the wallet app. A QR code is a 2D barcode consisting of a
collection of black square dots placed on a square grid with
Example: Wearable Wallets from MasterCard a white background. What is required on the merchant’s end
and Coin (onlycoin.com) is a barcode or QR code image reader that is networked into
In October of 2015, MasterCard (2015) announced a new the service via the Web. The whole system operates much
program—Commerce for Every Device—aimed at bringing like the way PayPal operates without using a Web page with
mobile payment capabilities to a range of consumer products a PayPal button to start the process. Instead, it’s started when
across the automative, fashion, technology, and wearable the code is scanned. As a point of fact, PayPal employs a
worlds. The goal is to provide consumers with the ability to cloud-based mobile wallet instead of device-based.
shop and pay with the device or thing that is most convenient This architecture is also being used to create Walmart Pay
and secure. The announcement named a number of partners (walmart.com/cp/walmart-pay/5998388) and Chase Pay
like Bulgari, GM, the Parsons School of Design, and Ringly (chase.com/digital/digital-payments/chase-pay). Actually,
(jewelry) along with a number of “wearables” companies, both Walmart and Chase are using a cloud-based mobile
including Nymi, Atlas Wearables, Moov, and Omate. The platform called CurrentC being created by the Merchant
program is an extension of the MasterCard Digital Customer Exchange (MCX) consortium (mcx.com) which is