With the introduction of NFC chips into smartphones, paying for goods and services with your mobile phone could well spell the demise of the debit card. Now with the imminent launch of Apple Pay in the UK you'll soon be able to walk into plenty of shops, whip out your iPhone and pay for your groceries and then pay for your train journey home. Here we look at Apple Pay, Samsung Pay and the latest entrant to the mobile payments arms race: Android Pay.
Many people don't realise that NFC isn't a new technology. In fact, it's been around for decades, and you've probably used it (or use it) without realising. Many building passes use NFC, as do Oyster cards for paying for public transport journeys. See What is NFC? for more details.
Android Pay (Google Wallet)
Google launched its mobile payment service way back in 2011, but it has gained very little traction anywhere, including the UK. Back in October 2014, we explained why Google Wallet wouldn't be coming to the UK any time soon.
In February, Google launched a service within the desktop version of Gmail which lets you send payments to friends and family for free. You'll no doubt have noticed the annoying pop-up when you compose a new email. It uses Google Wallet, and you can send money to people who don't have a Gmail account, but they will need to create a Google Wallet account to receive or send money. See also: LG Pay.
But now, it looks as if Google Wallet will be effectively replaced by a new service - Android Pay. Announced at Google's I/O conference at the end of May 2015, Android Pay will be built into the next version of Android (codenamed M at the moment) but will also work with Android phones back to those running KitKat (version 4.4 or later).
Android Pay will let you tap your phone - which needs to have NFC - on a contactless terminal in a shop to pay for goods and services. These are popping up in ever more shops and restaurants, and there will be another burst of them before October 1 this year since that's the date when retailers in the UK will be held liable for fraudulent transactions if they don't have a chip-and-PIN card reader.
As you might expect, you can also use Android Pay to pay for in-app purchases or anywhere online with an Android Pay button.
The system will initially use a PIN for authentication since hardly any Android phones have fingerprint scanners. This will likely change when the first phones running Android M appear later this year.
At MWC 2015, Samsung launched Samsung Pay along with the Galaxy S6 and S6 Edge. Both phones have NFC for use with Samsung Pay, but there's a key difference to Apple Pay (below).
Rather than limiting transactions exclusively to NFC, Samsung Pay will also work with magnetic strip readers - old technology which is available in virtually every shop that accepts card payments. It's a new proprietary technology called Magnetic Secure Transmission, or MST for short.
Samsung has partnered with MasterCard and Visa and says Samsung Pay will launch in Summer 2015. That's in the US and Korea, with Europe following later.
Within the Samsung Pay app, you'll be able to add your cards (including so-called Private Label Credit Cards) and later, when you want to pay for something, you swipe up from the screen bezel to launch the app, choose which card to use and then use the fingerprint reader to authenticate the purchase. Like contactless payments, you'll tap your phone to the card reader to make the purchase.
However, while the system sounds great in principle, only Galaxy S6 and S6 Edge owners will be able to use it. It's possible that other NFC and fingerprint reader-equipped Android phones will be compatible with Samsung Pay, but we'll have to wait and see what Samsung decides.
Apple made a big deal of being able to make secure payments via NFC when it launched the iPhone 6 and 6 Plus. And at its Apple Watch event on March 9th it confirmed that owners would also be able to use their wrist-mounted gadget to pay for stuff too.
The company stopped short of revealing a UK (or European) launch date for Apple Pay at that time, but at the WWDC keynote on 8 June it finally announced that the service would launch for UK users in July 2015.
Eight UK banks are on-board with the notable exception of Barclays, for the moment at least.
Because Apple Pay requires NFC and won't work with older terminals, it won't be usable in as many places as Samsung Pay. Here's more on Apple Pay including a full list of banks as well as the places you can pay using the system.
For details on how Apple Pay will work on the iPhone and Apple Watch, see our sister site MacWorld's guide to Apple Pay.
Other ways to pay from your smartphone
Both Apple and Samsung's payment systems are all well and good, but they require specific smartphones to work. If you don't own a Galaxy S6, or iPhone 6 then you're out of luck.
There are other apps you can use to make payments from your phone, though.
A new service in the UK is Paym. It's supported by the majority of UK banks and lets you send money to friends and family via an app, just using their phone number. They'll need to be set up with Paym too, but it's well worth asking anyone you send money to (or request it from) regularly to get set up.