Announcement and Analysis of Google Pay...ah Google Wallet

In early May 2015, a panel of merchant services and payment experts forecasted the future of the payment industry. The main trends spoken about were PCI compliance and EMV, Apple Pay and Mobile POS. I asked this panel of the status of Google Wallet and it seemed like an uneasy silence. They did not know.

Yesterday, a mere 2 weeks later, we have a clearer picture. Google announced Android Pay. Android phones are already built with Near Field Communication (NFC). The solution is to pay for products with a wave of your phone at the merchants Point of Sale terminal. Apple Pay was first to market and launched in September 2014.  Android users, which accounts for about a 62% of the US mobile phone market share and 79% of the worldwide mobile phone market share, were blocked by the cell phone carriers.   Reason:  AT&T, T-Mobile, Verizon (Not Sprint) were promoting their mobile payment darling; ISIS.  Ironically, as of today, Walmart, Home Depot and other major retailers have turned off NFC at their Point of Sale terminals.  And there is another reason for that.

Major retailers don’t like paying the credit card processing fees, typically in the 2-3% range.  They got together and formed Merchant Customer Exchange, another mobile payment platform with the app called Current C.  They want to cut into those processing fees.

As the players jockey for position, let’s examine a few mechanically differences between Apple Pay and Android Pay.  Apple uses a fingerprint scanner, Android uses a Pin. I have a feeling Android manufacturers will change this soon because of this announcement.

Google says your data is secure. They are working with major payment processors and banks “to deliver industry standard security tokenization”.  Tokenization is another way of saying that the real credit card number is not transmitted for obvious security reasons.  Apple creates a token in a chip called the Secure Element.  Android token is created in the Cloud.  If you are in a cell dead zone, Android will not work.

If your phone is lost or stolen, just use the Android Device Manager (ADM) to lock down the device. However, ADM does not work all the time as advertised. If you need to use ADM to reset a forgotten password, you may be surprised that you have to reset the device to factory settings. You loose all your apps, configurations…everything.

It’s clear Google went to the major retailers to get early buy-in.  Google Pay will be accepted at 700,000 store locations.

Sources: http://officialandroid.blogspot.com/2015/05/pay-your-way-with-android.html by Pali Bhat, Google
Director, Product Management

Despite iPhone 6 hype, Android continues to dominate iOS market share
http://bgr.com/2014/07/01/android-market-share-2014/

A Primer on Android Pay and Google Wallet
http://bits.blogs.nytimes.com/2015/05/28/a-primer-on-android-pay-and-google-wallet/

The Android Pay details Google didn’t tell you
http://www.cnet.com/how-to/android-pay-phone-how-it-works/

Latest Google Wallet update doesn’t fix original problem, NFC payments still at the mercy of carriers
http://phandroid.com/2013/09/19/google-wallet-nfc-payments-blocked/