What is Android Pay?
Android pay is a simple and secure way for android users to make payments using their phone. Initially announced by Google back in March, Android pay was officially launched in the US in May, and is used in roughly 700,000 stores across the country.
Android Pay is integrated into apps from Lyft, GrubHub and Groupon to name a few, and includes MasterCard, Visa, Discover and American Express as a part of its system. Google partnered with financial tech Braintree as well as online payment provider eWay in order to create the system.
After previous attempts to enter the mobile payments market failed, Google sees Android Pay as a crucial step in gaining market share that has previously been dominated by Apple Pay.
“The stakes are huge,” said Vijay Koduri, an executive at payments processor Adyen. “Payments have always been strategic for Google. They’ve tried several initiatives, but like mobile payments at large they haven’t gotten mass adoption.”
Android phones currently account for 3 out of every 4 smartphone users worldwide. iOs systems account for 18 percent of the mobile market, meaning that the two combined make up 96 percent of the mobile market.
What is Apple Pay?
Apple Pay is a mobile payment service and digital wallet offered by Apple Inc. Similar to Android Pay, it allows users to make payments using their iPhone 6 and later versions. By holding their iPhone up to credit card terminals, customers can use touch ID (fingerprints) to make a purchase.
Apple Pay was first announced at Apple’s iPhone 6 event in September 2014. CEO Tim Cook described the reliance on plastic cards with a magnetic stripe as ‘outdated and broken’. Apple Pay first expanded to the UK in July this year, and arrived in Australia and Canada in November.
How do they differ?
As they are both mobile payment platforms, the two are very similar in design, yet have some key differences;
- Android pay doesn’t have the same level of security as Apple. With Android, users merely have to unlock their phone over a terminal, whereas Apple requires the user to scan their fingerprint before completing any payments
- Apple Pay is available on a more limited number of devices, with online the recent iPhone 6 and after versions compatible with the software. According to Google, any Android device running on version 4.4 and up is compatible.
- Android pay has support from more major banks, which will be discussed below
Aside from these points, there aren’t really any major differences between the two. Tech Times calls the Android app a sleeker and more secure version of Apple Pay. With Android offering support for more devices than Apple, Tech Times expects a wider adoption from Android users.
Who uses what?
Many of Australia’s major banks have chosen to back Android over Apple. With the app not officially releasing until ‘sometime in 2016’, many banks and financial institutions are still in negotiation with Google. As it stands at the moment, the Australian banks that have adopted Android Pay are:
- The Westpac Group (includes St. George, Bank of South Australia and Bank of Melbourne)
- Bendigo Bank
- Cuscal (including over 70 of their smaller financial subsidiaries)
- ING Direct
- Macquarie Bank
In contrast to the support Android has received, Apple pay is yet to be adopted by any Australian banks. Its sole partner in Australia is American Express. This is mainly because Apple has demanded a cut of the $2.5 billion in interchange fees from Visa and MasterCard.
ING Direct Executive Director Lisa Claes believes that Android Pay is a natural progression for her customers who are recognised as being highly digitally engaged.
“Mobile devices play a central role in our lives. Mobile payments are a natural next step, being quick, convenient and by integrating a seamless experience for our customers who have already demonstrated how much they love managing their money digitally by their use of our native app.”
“Our focus is very much on supporting our customers to have the freedom to manage their money and spending in line their individual needs and preferences, by offering a variety of payment choices in a secure and safe environment”.
Another big supporter of Android Pay is ANZ. Managing Director of Products and Marketing had much to say on the topic.
“This is an important milestone in the evolution of the mobile payments landscape, and Google’s decision to make Australia one of the first markets to implement Android Pay demonstrates how quick Australians adopt new technologies”.
“Android Pay will provide our customers with a quick and secure way to make payments with their smart phone and we think it will have strong uptake given the ability to incorporate additional features such as gift and loyalty cards”.
Australians are the largest users of contactless payments in the world, with over 60% of all transactions being contactless. The number of major banks adopting Android’s services at the expense of Apple Pay could result in Apple being left behind in the mobile payments market in Australia before long.