Mobile Payments Are Finally Here. Wait, What?

There has been a good amount of press and fanfare recently regarding mobile payment technologies, and rightfully so. With the recent announcement of Apple Pay, the digital and retail world is buzzing – some with excitement, others with a resounding, “Meh.” Are consumers ready to embrace mobile payments for good?

It’s important to note that mobile payment technology is nothing new. Do you remember 1997? The year that brought us Evander Holyfield’s ear in Mike Tyson’s mouth and Jack and Rose never letting go (except they did, duh) also brought us the first mobile commerce service, introduced in Helsinki, Finland, with the appearance of vending machines that accepted payment via SMS messaging. The industry has come a long way since then, now allowing consumers to store their debit and credit cards to a secure “wallet” on their mobile devices. We could ramble on for the next 1,000 words or more taking sides and pointing fingers, but instead let’s focus on how it’s happening and whether or not it’s here to stay.

Google Wallet has been providing mobile payment technology via Android-enabled devices for the last couple of years. These devices leverage NFC technology (near-field communication) that allows them to communicate with other NFC-enabled devices by bringing them within close proximity of each other. This type of technology is the widely-adopted method of choice as Apple has integrated it, too, with its Apple Pay platform.

Both Google Wallet and Apple Pay allow consumers to store their debit and credit cards to their respective devices, and between the two, will likely lead the mobile payment category over the coming years. The biggest differences between the two can be attributed to how the payment experience unfolds for the user, security and accessibility.

  • Payment Experience – Google Wallet requires users to unlock their phones and enter a PIN prior to holding the device near a contactless reader. Consumers have not been well-educated on what all Google Wallet can do or where it can be used. Apple Pay requires users to only hold their iPhones near the contactless reader and scan their thumbprints for verification. Consumers have been well-educated on how to properly carry out a mobile payment as well as where Apple Pay is accepted (McDonald’s, Panera Bread, Petco, Sephora, Subway, Walgreens, Whole Foods and more).
  • Security – Google Wallet and Apple Pay both use a tokenization process that alleviates the need to transfer a user’s credit card information amongst merchants. This protects users from security breaches as the tokens are generated for one-time use each time a transaction occurs. The difference thus far between the two services is how information is captured. Google Wallet sees users’ purchase information regardless of the tokenization, while Apply Pay will not have access to users’ purchase information.
  • Accessibility – Google Wallet, as previously said, has been available for a couple of years. It is available on Android Gingerbread platforms as well as on older iOS versions, not to mention the plethora of devices. Apple Pay is only available on iPhone 6 and 6+ as well as only on iOS 8. Apple has proved in the past that it can alter how consumers perceive and interact with a particular technology or device, but this could also prove to be a jolt for Google Wallet as consumers vie for alternatives.

The future of mobile payments is bright, but it remains to be seen how consumers will interact with this once techy, novel technology and bring about the juggernaut of an industry Google and Apple expects it to be. Let us know what you think. Would you use Google Wallet or Apple Pay?

Posted Tue, Sep 30, 2014 by Brian Gronniger, Elena Karakizis in News