News Stay informed about the latest enterprise technology news and product updates.

Google takes off the gloves with Android Pay

At Google I/O, the search giant unveiled Android Pay, a mobile payments platform that promises a better customer experience. The pressure's on for CIOs. Also in Searchlight: other news from Google I/O; Cortana will be available on iPhone and Android.

The number of consumers making purchases on their smartphones continues to grow. This week, Google made clear that...

it's ready to meet those customers where they are (and take on nemesis Apple Pay in the process). CIOs -- and not just those in retail -- should pay close attention, IT experts say.

At the Google I/O developer conference in San Francisco, the tech giant unveiled the details of its new payments platform, Android Pay, which is open to developers. Google is working closely with credit card companies, merchants and payment processors, allowing them to build their own apps on top of the service, which customers can use either in-app or in-store. Android Pay can also be integrated with participating retailers' loyalty programs, allowing users to rack up rewards every time they make a purchase -- and allowing retailers to gather more data on customers.

The goal is not to replace credit cards, said Raul Castañon-Martinez, a senior mobility analyst at 451 Research. Rather, Google's aim is "providing a better user experience ([by] reducing friction and improving security since the retailer does not have the credit card information)," he wrote in an email.

If Google and other companies like Apple continue with these efforts -- namely making the purchase process easier and more secure, and reducing the risk for fraud and theft -- it will not only spell good news for consumers, but will also put greater pressure on companies and their CIOs to meet their customers' growing expectations, said Jeffrey Hammond, principal analyst at Forrester Research Inc.

"As consumers shift over to digital payments, they will tend to favor companies and stores that support them. Supporting these payment modes will quickly become a customer expectation due to their convenience," Hammond said.

The retail CIO's role in mobile payments

CIOs at retailers will feel this pressure the most, requiring them to work closely with their business partners, said Forrester principal analyst Frank Gillett.

Retail industry chief marketing officers (CMOs) want the process of making payments to be as seamless for customers as possible. According to Gillett, the majority of customers will come to feel that paying with a mobile device is easier than searching around a purse or wallet for their credit card. There's another value to getting rid of "the card dance," as Gillett calls it. "Digital payment methods will soon offer easier frequent shopper identification and rewards than today's method of having to pull out a separate loyalty card, which doubles the card dance," he said.

Business operations people will lead the charge on coordinating the entire "in-store change-out" (including training and business operations improvement), but IT will need to support these changes, Gillett said. The CIO will likely also need to work with the CMO, who might own parts of a company's loyalty program, systems managed by the IT organization.

Additionally, chief financial officers are keen on reducing payment card fraud and data theft. Mobile payment systems, along with chip-and-pin technologies, are promising solutions that could address those issues. CIOs, for their part, will be in charge not only of implementing the new payment terminals that will work with both technologies, but also of "implementing, managing and monitoring the end-to-end security from the payment terminal out to the financial networks, and across internal systems," Gillett said.

All CIOs must gear up for new mobile payment modes

It's not just retail businesses that need to make moves. In businesses that are making the leap to mobile payments, IT needs to work closely with digitally savvy partners, Forrester's Hammond advised.

"[CIOs] should partner with the digital organizations in their shops, or whoever is doing customer ethnography and journey mapping," he said, referring to the process of documenting a customer's experience across all the channels that the customer uses to interact with a company.

The partner might be an external digital agency working with the company's marketing team, Hammond added.

Ultimately, a mobile payments solution such as Android Pay is experimental, cautioned Sucharita Mulpuru, retail and payments analyst at Forrester. "If a business leader wants to consider it, IT needs to figure out a way to make it happen or to come up with plausible reasons why something isn't feasible," she wrote in an email.

CIO news roundup for week of May 25

Take a look at more technology headlines from the week:

  • What else did Google show off at Google I/O? Lots of things: the new Android M OS, which includes Now on Tap, a digital assistant that uses natural language processing; Google Photos, a photo service with "unlimited storage"; the addition of a Buy button on Google's results pages; and a cardboard virtual reality headset, for starters.
  • Watch out, Siri: Microsoft announced that this summer, iPhone and Android users will be able to access its digital voice assistant, Cortana, through a mobile app. Cortana works with Windows PCs, the way most people interact with Microsoft products.
  • Blind and visually impaired people will soon be able to use a cane smart enough to help them to recognize faces. UK researchers are calling the smart cane XploR, which comes with a camera, GPS and facial recognition software.
  • GigaOm, the influential tech news blog that was abruptly shuttered in March, is being resurrected. Austin startup Knowingly purchased the site and is planning to re-launch it in August. One catch: The only thing the new site might have in common with the old one is the name, speculates The Verge. GigaOm isn't alone -- Vox Media is acquiring tech news website ReCode, both companies announced Tuesday. "It's not a secret that being a smaller fish is really hard," veteran ReCode journalist Kara Swisher told The New York Times.

Check out our previous Searchlight roundups on experts' take on enterprise cybersecurity from MIT CIO Symposium and Samsung's leap into IoT.

Next Steps

Check out other Searchlight columns on mobile payments: Facebook unveils a peer-to-peer payment tool in Messenger, and mobile payments steal some of the spotlight at this year's Mobile World Congress. Then, watch this video to learn more about Paydiant, the technology behind the CurrentC mobile wallet.

Dig Deeper on Enterprise mobile strategy

PRO+

Content

Find more PRO+ content and other member only offers, here.

Join the conversation

1 comment

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

Does your company have a digital payments strategy?
Cancel

-ADS BY GOOGLE

SearchCompliance

SearchHealthIT

SearchCloudComputing

SearchMobileComputing

SearchDataCenter

Close