Mobile payments have become an increasingly common method consumers have been using to make purchases both in-store and online. With the popularity of various mobile wallets on the rise, it can be confusing on the similarities and differences of each one. To help you as a merchant get a better idea of what each platform has to offer, below are some main points to help explain how each one works:
Apple Pay was released in October of 2014 and is currently only available for the iPhone 6, iPhone 6 Plus, Apple Watch, and iPad (for online usage only). Over 700,000 retail locations are able to accommodate Apple Pay and it can also be used for app or online purchases, making it an easily accessible mobile wallet for consumers to use.
Apple Pay is supported by Near-Field Communications (NFC), which allows consumers to hold their phone over an in-store contactless terminal to make a payment. Merchants can easily accept ApplePay with an NFC-enabled terminal. One difference with Apple Pay is that before making a payment, users must use the Touch ID feature and scan their fingerprint on their device first. The good news is that users do not have to unlock their phones to do this, cutting down the transaction time.
Apple Pay uses a tokenization process to keep financial information safe and secure. Instead of Apple Pay sending debit/credit card number to the merchant, a one-time “token” is sent to the merchant’s terminal, ultimately protecting payment details through the payment process. Card information instead is only stored on the consumer’s device and never sent to the merchant.
Android Pay is not currently available, but will be ready for use in late 2015. Once accessible, it will be available on any Android smartphone that runs on Android 4.4 KitKat or newer. Just like Apple Pay, Android Pay will be supported at over 700,000 retailers.
Android Pay will require a NFC-enabled terminal as well for purchases. When making a payment, consumers using Android Pay will have to unlock their phones and will “tap to pay” – no Touch ID with a fingerprint is required like Apple Pay. However, both Apple Pay and Android Pay require the consumer to place their phone by the merchant’s contactless payment terminal for payment.
Android Pay also uses the tokenization method of generating a random code with each transaction instead of distributing the user’s debit/credit card. One benefit is that Android Pay will be available on more smartphones due it being accessible on more Android devices than Apple devices once it is released.
Samsung Pay is also not currently available yet, but is projected to launch in Summer 2015. Similar to Apple Pay, Samsung Pay is limited on the devices that will support it, with only the Samsung Galaxy S6 and S6 Edge being options. It is estimated that over 30 million merchants will have the ability to work with Samsung Pay, as it is slightly different than Apple Pay and Android Pay.
Like Apple Pay and Android Pay, Samsung Pay works with NFC terminals. However, Samsung Pay has the competitive edge, as it will also support traditional standard magnetic strip terminals in-stores. All the consumer would have to do is place the phone near the magnetic strip reader and the data will transfer to the terminal in the same way a magnetic strip on the back of a debit/credit card would.
Matt Barr from MasterCard reinforced this by saying, “Samsung will prefer tap and pay, so if a device detects an NFC field on the terminal, then it will default to that. If it doesn’t, then the Samsung device user can elect to pay using MST. From a merchant’s perspective, there’s nothing the merchant needs to do, which is a part of our strategy around how we try and be as backwards compatible as possible and to make it easy for these digital payments to be made.”
Since many stores have not yet transitioned over to NFC technology, more merchants will be able to accept Samsung Pay as a method of payment from the start. Additionally, Samsung Pay will implement tokenization for payments and will require fingerprint identification from the user.
Each of the mobile wallet options has benefits. As merchants begin to see a growth of mobile wallets being used by consumers, they should learn how each mobile wallet works and be prepared to accept them for transactions. . All in all, we can expect an increase with mobile payments becoming more prevalent to make purchases for every day use.