Android Pay Is A Tipping Point For Mobile Payments As Well As Loyalty Schemes

You can sense that today is the day mobile payments reached a tipping point. Those of us who are committed Apple fans have been making contactless mobile payments for up to thirty pounds since last summer. Today, however, the majority of the market -- 60% of British phones -- can now join in the payment revolution as Android Pay is launched in the UK, the first market outside its native USA.

As usual, I have to say, although I am a bit of an Apple fan boy, Android has answered a big bug bear for mobile payment users. It was only the other day that I was at a Tesco Express checkout and i forget where my payment app resides on my phone. There I was, searching for pay, when the actual app resided in "wallet." Anyway, it took a few clicks and didn't work at first. The Millennial behind the cash register suggested, as if I already knew, that i should just press the home button twice while my lock screen was on and it would load automatically. All at once Apple Pay became actually usable. Like so many things with an Apple, things rely on secret knowledge and shortcuts that us mere mortals discover one at a time when we chance upon a guru.

No -- according to reports, Android Pay will fire up automatically the moment the phone is held near an NFC-equipped card machine. No need to tap buttons in the right order, search for an app -- the screen will come alive and just ask the owner to supply their thumbprint or PIN.

Surprisingly, a payments industry insider tells the BBC that just 1% of contactless payments come from mobile phones, but this could well be attributed to how simple it is already to use an Oyster card in the capital for travel or to hover a debit or credit card over a reader in a store to pay for goods. Low penetration doesn't mean mobile payments have no future -- just that they are a part of contactless payments and will no doubt grow as the technology gathers traction.

To say all 60% of phones can now make contact payments might be overstating the case, however, because Barclays stands out as the one high street name that is not backing mobile payments because it is said to be developing its own app. To add a further level of complication, Samsung is due to launch its own mobile payment app later this year -- but of course, there is nothing to stop Samsung smartphone owners, who do not bank with Barclays -- from downloading Android Pay and start making mobile payments today.

The interesting part of Samsung's move is that it is believed to be developing a mobile payments club where app users will also get incentives and offers. That makes a lot of sense, doesn't it? You can imagine offers with supermarkets and fuel stations, coffee chains and fast food outlets that will either allow users to collect reward points or get money off -- and no doubt offer Samsung extra branding in-store around cash registers and an improved slice of the total amount spent, as its processing fee.

Needless to say, then, mobile payments are about to make a huge impact and this is the year we will go beyond a very low level of adoption -- 1% of payments if the BBC is to be believed -- to more mass market adoption.

For marketers it not only means discretionary spend is made easier, but there are bound to be shopping clubs springing up around each app, as Samsung has already made clear will be the case when it launches. Loyalty schemes might well need a dusting off to see how existing CRM insights could be improved through teaming up with a mobile payments app.

Mark these words -- these apps will become the equivalent of a Nectar card that you can also use to make payments, so if you're not strategising how your current CRM effort will fit in to this development, so you're prepared, your rivals almost certainly will be.

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