While Apple Pay has been received favorably since its launch last year, Google was technically the first mobile payments system on the block with their since re-branded Google Wallet. Android Pay is their latest foray into mobile payments and Google is set to drive agenda forward with significant advantages in adoption, capability, and compatibility.
Potential early adopters without an Apple device have been left out of mobile payments and are hungry for their turn. Unlike Apple, Android device users and merchants looking to cater to them will have several handset options as Android phones have been NFC enabled for last few years. Android Pay may face something of a sibling rivalry with Samsung Pay, the global phone giant’s competing standard. Samsung devices make up 65% of the market share that use the Android operating system.
Android Pay has a new value proposition to consumers: compatibility with merchant and manufacturer loyalty programs. These are programs where customers can use, track, and possibly redeem loyalty points with participating merchants (Whole Foods Market Rewards) or product manufacturers (My Coke Rewards). This may not be enough for early adopters to switch to team Android, but it could be a tipping point for those on the fence and most certainly will drive adoption amongst the installed user base.
One of the most significant contributors to Android Pay is its product inclusion. Unlike Apple, eligible phones are not limited to the latest, most high-end model. While Apple Pay is only available on iPhone 6, iPhone 6 plus, or the Apple Watch, Android Pay will be accessible on many more manufacturers and generations, even some older or less expensive models, as Android devices have been incorporating NFC chips as early as 2013.
Samsung’s unique benefit is its magnetic secure transmission (MST) that makes it almost universally compatible. While Apple Pay and Android Pay are only compatible with NFC enabled merchants, Samsung’s technology allows it to imitate the actual magnetic swipe of a credit card. As long as a merchant accepts credit cards, they should be able to accept Samsung Pay. By taking the burden away from merchants, users can pay with Samsung Pay at most retailers in the U.S., compared to 700,000 NFC enabled stores.
The perception of Apple Pay is that it is widely used. However, in reality, the initial adoption rate was low, and Apple had to learn what its users wanted from the service and implement accordingly over the past year. Updates included adding merchants, financial institutions, and business accounts.
While the majority of avid iPhone loyalists will not be incentivized to switch to Android over payment capabilities and vice versa, Android Pay has opened a new door for non-Apple users. The competition only pushes innovation further and betters the products available to consumers.
Jay Bhattacarya is CEO and cofounder of Zipmark.
