It’s Official: Microsoft Is Licensed To Do Payments

Microsoft has officially entered the world of payments. The Windows software giant has received its first money transmitter license from the state of Idaho’s Department of Finance, USA Today reported on Monday (April 6).

Microsoft Payments Inc. has also registered with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) as a money transmitter and provider and seller of prepaid access, according to documents unearthed by payments consultant Faisal Khan.

Microsoft was approved for its Idaho license on March 24, 2015, and no other state has yet issued a license, according to mortgage information service NMLS. However, Microsoft told FinCEN that it plans to operate as a money services business in all 50 U.S. states.

The Idaho license and FinCEN registration are the first signs that Microsoft plans to go into full-scale competition with Apple and Google for mobile payments. At this point, Apple Pay has a long lead, and while it’s having some teething pains, it has also lined up thousands of banks that have signed contracts to fully support the system, and hundreds that have already gone live with it — and it has an overwhelming lead in the number of mobile devices in use.

Microsoft’s payments moves aren’t really a surprise. Last month, Microsoft showed audiences at its WinHEC conference in Shenzhen, China, a concept video and said a new Windows 10 Mobile feature called “Tap to Pay” will support payment card numbers stored in a mobile phone’s NFC Secure Element or through Host-Card Emulation (HCE). Microsoft previously unveiled biometric authentication that will be supported by Windows 10 and can be used with fingerprint and iris scanners and facial recognition.

A China WinHEC presentation slide also indicated that the new system would have “alignment” with Visa, MasterCard and American Express, though it’s not clear how far along tie-ups with those card brands currently are, or whether the Microsoft payments system will use Visa and MasterCard’s respective tokenization systems.

Also unknown: How much progress Microsoft has made with getting banks on board, and exactly how much additional heavy lifting banks will need to do to add Microsoft after getting Apple Pay up and running.


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