What matters more to business, Google or the Queen?

Written as editor of the New Statesman’s NS Tech and first published here.

Nothing represents more of a clash of civilisations than the announcement that Google’s Android Pay has launched in the UK, followed very ceremoniously just an hour later by the Queen’s Speech.

One is all bells and whistles, following a secret press briefing in a trendy coffee shop last week, the other is all the usual pomp and ceremony. But does either have any substance?

Digital Economy Bill

The Digital Economy Bill has now been outlined as part of the Queen’s Speech and should apply UK-wide if it makes it into law.

It had been rumoured for some time and is likely to have been informed by the Department for Culture, Media and Sport’s UK Digital Strategy consultation.

The Bill is set to mandate the right to “request fast broadband” of 10Mbps for all homes and businesses across the UK.

The government admitted in its own consultation on this issue that still one in 10 homes doesn’t yet have this service.

On the new provision, it explained back in March: “This will give people the right to request an affordable broadband connection, at a minimum speed, from a designated provider, up to a reasonable cost threshold.”

Which, in spite of the fact it could soon be heading into law, doesn’t exactly scream “we’ve all got internet now!”.

A new Electronic Communication Code proposal published yesterday should also make its way into the new Bill, promising to make it easier to build phone masts and lay broadband cable.

According to a report by O2 following a Digital Communities pilot in St Helens last year, the economy could be boosted by £1.5bn by 2020 if just 30 towns got better digital infrastructure.

Modern Transport Bill

Thankfully the Queen didn’t have to say drone or spaceport, but both are likely to get some attention in a new Modern Transport Bill. Presumably until now all government transport bills were focused on old-fashioned tech?

Government has actually been pretty relaxed about driverless car testing to date, compared to other countries, not least because it believes that those 235 hours spent driving every year could be better used for work.

It published an action plan back in February last year, where it had already established: “Real-world testing of automated technologies is possible in the UK today, providing a test driver is present and takes responsibility for the safe operation of the vehicle; and that the vehicle can be used compatibly with road traffic law.”

Motorway testing is already slated for 2017.

The Modern Transport Bill is expected to create more opportunities for investment in autonomous vehicles, plus electric cars, drones and even space rockets.

It’ll also enshrine provisions for driverless car insurance. On this, Caroline Coates, head of automotive at law firm DWF, told NS Tech: “It is not yet clear what the references to insurance will mean in practice. Does this mean insurance only for the purposes of testing or consideration of a wider government scheme for when driverless vehicles are on our roads?

“The insurance industry are already grappling with these issues – the Association of British insurers recently created a working group to focus on how they are responding and the Government will listen closely to their suggestions.”

The hugely debated Investigatory Powers Bill has made it over from the previous session of parliament. It could present a huge problem for companies that use encryption to protect their data.

Android Pay

Where the Queen was light on detail, Google has been pretty forthcoming with its plans for mobile payments.

Already people are able to leave their wallet at home if they are an Apple user, battery power notwithstanding, and today many Android users in the UK can too.

Depending on who you ask, Android has around 52% smartphone market share in the UK. That’s where Kantar had it in January, with Apple on 39%. But, as with older iOS handsets, Android Pay only works on phones that have an NFC chip inside and that’s by no means all of them. So the potential user figures aren’t exactly clear.

If you have already updated your systems to accept contactless payments, Android Pay should work seamlessly. But for users, after you download the app and start adding bank details, it only works with “eligible” Visa and Mastercard credit and debit cards from participating banks, which doesn’t include Barclays.

Android Pay also now comes as a payment option in-app for brands like JD Sport. All payments using Android Pay are of course tokenised, the industry standard security for payments.

Android Pay is launching with a slew of brand partners offering ‘Android Pay Day’ deals to customers who buy from them, the kind of targeted ads that have long been the dream of mobile loyalty believers. This really could become critical as a business tool, mediated by Google, for upselling and offering contextualised offers in a mobile payments world.

“The number of contactless card payments is set to surpass 3bn in the UK this year,” Jeremy Light, MD of Accenture Payment Services, told NS Tech. “But with mobile payment now available to more customers than ever, we can expect to see contactless payments shift from cards to smartphones in the coming years.

“For the time being, however, cash remains king among UK consumers with more than half of transactions relying on coins or notes.

“The acceleration of cash displacement can’t come soon enough for banks,” he adds “With an increase in electronic payments comes a reduction in the costs associated with handling and processing money.”

But will potential users be rushing onto Android Pay, given how much Google already knows about them?

“We’ve been weaned onto ‘tap n go’ credit cards on the high street, and plane and train boarding cards opened in emails or in apps,” says Professor Paul Springer from the University of East London, and author of Pioneers of Digital. “But with a phone as credit card it’s more significant, and instills more anxiety about security.

“How are we guaranteed that yet more personal details that link to our finances can’t be stolen, by putting all our eggs into one basket? When security measures are proven, take up will soar. Until then it may still be an uphill marketing task.”

Hence the cheeky Starbucks launch deal.

“In the long term though, it is moving towards the end of cash,” he agrees. “This is better for small businesses as it cuts out the number of transaction processes, and gives customers less stages to change their mind.

“Small businesses will still have to pay though for every transaction. The question therefore is not what it means for small businesses but for consumers, because the levy will ultimately be passed on to them.”

Google versus Queen

We’ll have to wait for more detail on what the government has planned for the UK’s digital economy up to 2020. Good connectivity for everyone is certainly something that’ll give business a nice bump and it’s certainly a long-standing item on gov’s to-do list.

Android Pay is now out in the wild and presents another pretty seamless service from Google (beyond the handset and banking caveats) that it’s very difficult for customers to say no to.

Google wins, again.

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