Microsoft isn’t launching its own mobile payments service right now, but it’s laying the groundwork to take on Apple Pay with a money transmitter license.
Microsoft quietly applied for the license in February under the name “Microsoft Payments, Inc.,” which was found by banking consultant Faisal Kahn, and by late March Idaho had become one of the first states to grant approval. The move coincides with Microsoft’s announcement of Host Card Emulation support in Windows 10 for phones, Ars Technica reports, potentially allowing devices to transmit credit card information without a Secure Element inside a SIM card.
The mobile payments space has been heating up since Apple launched its own Apple Pay service last fall. Google, which struggled for years to establish its own Wallet service, will likely have the backing of U.S. wireless carriers now that it’s acquired their Softcard technology. Samsung, meanwhile, is striking out on its own by acquiring LoopPay, a company that offered standalone NFC payment cards since 2012. Microsoft has its own Wallet service on Windows Phones, but the payments element requires a secure SIM card that is no longer supported by U.S. carriers.
Keep in mind that Microsoft hasn’t revealed any actual plans to compete with its rivals’ offerings yet. “Becoming a money service business gives us the flexibility to provide new, innovative cloud services to our customers but we do not have any product announcements at this time,” the company told Ars Technica.
Why this matters: For now, we can only imagine what Microsoft might do. Perhaps the company is cooking up a direct mobile payment competitor to Apple Pay-though any effort on that front may be hamstrung by Windows Phone’s meager adoption—or maybe Microsoft is looking to simplify online transactions on Windows PCs. In any case, payments clearly aren’t something Microsoft wants to ignore as it shifts its focus to from software to services.