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Google Wallet, CloudPay Take Aim at Mobile Payment Ubiquity

With credit card point-of-sale compromises continuing to make headlines, a movement to turn smartphones and other mobile devices into payment mechanisms is under way, as evidenced by the splash that Apple Pay made when it launched. And slowly, more options—old and new—are making their way to the mainstream market.

Mobiles-as-payment cards is a movement that has roots in the near-field communications (NFC) space, with entries like Google Wallet for Android pioneering the concept of tap-and-pay. Google has now struck a deal with Verizon, AT&T and T-Mobile to purchase "some exciting technology and intellectual property" from Softcard, the carriers' mobile payments initiative that was a rival contactless technology that never really went anywhere with merchants or consumers; and in turn, the three carriers have also agreed to preinstall Google Wallet on their Android phones.

Meanwhile, Giesecke & Devrient (G&D) will be launching Convego CloudPay, a mobile cloud payment service compliant with the specifications of Visa, Mastercard and American Express, at Mobile World Congress 2015 in Barcelona.

For banks, the solution also includes managed services in payment scheme-certified data centers operated by G&D.

It comprises two main components: the CloudPay Server for mobile card provisioning and life cycle management, and the CloudPay Client software, which includes digitalized payment cards and also executes payment transactions.

To enroll for cloud-based payments, consumers download the mobile app offered by their bank from mobile app stores such as Google Play. Once enrolled for a digitalized payment card, they receive their payment card over-the-air from the CloudPay Server and can start using it on the phone app at various merchant locations that support contactless transactions.

For their part, banks can offer consumers mobile payment solutions and other mobile financial services under its own brand.

“G&D is proud and happy to accompany banks into the digital age and support them with contemporary solutions,” said Edgar Salib, group senior vice president and head of the division of financial institutions at G&D, in a statement.                              

Researchers say that mobile NFC options are clearly a more secure alternative to using physical payment cards—with any luck, it will become a mainstream choice sooner rather than later.

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