Microsoft's plan for Mobile Payments was introduced in March (2015) as the "tap-to-pay" feature that will be in its forthcoming Windows 10 for phones and small tablets (a.k.a. "Windows Mobile"), which would support Host Card Emulation.

Newer Android phones use HCE to transmit NFC signals to terminals, which means third-party developers can use this process to build NFC functions into their apps. Just as important, the elimination of the Secure Element makes the payment platform carrier independent, and hence carrier agnostic. These advances are sure to be greeted well in the marketplace, but what is more intriguing is where Microsoft is headed with the possible introduction of mobile payments into their ecosystem.

Based on a money transmitter license that was granted in Idaho, it appears as though the Redmond, Washington-based company is looking to go up against Android Pay, Apple Pay and the LoopPay system that helps form the base for Samsung Pay. Some may see this as a proactive approach by Microsoft to keep pace with competitors in the payments space. However, Microsoft may be trying to become a Back-End Processor.

Becoming a Back-End Processor would put Microsoft in direct competition with PayPal, Square and Intuit. These companies are Card Processors. However, unlike these Back-End Processors an advantage Microsoft would have is it would help establish potentially secure payment solutions not tied to hardware solutions. Creating a competitive product in this space would be advantageous for an enterprise software company like Microsoft.

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