In today’s blog we will discuss the final, and possibly most threatening, platform for mobile pay. Developed by Google for use on any Android powered smart phone, Android Pay functions similarly to the way Apple Pay does for iOS devices. Utilizing NFC chips embedded in phones to facilitate communication between the phone and terminals, payments can be processed in seconds and consumer time can be saved1.
In many ways, however, Android Pay presents a whole new set of advantages and difficulties for consumers, businesses, and banks. The most glaring difference between Android and Apple Pay is the absence of transaction fees on the Android platform2. Google has elected not to charge any form of transactional fee to banks looking to have their cards usable on the service or businesses looking to accept the payment method2. Instead, the platform earns money through small ads displayed on the operating system2. This is obviously a massive boost for businesses trying to cut costs, however for banks it represents a clear conflict. They will be happy to please customers by being available on the service (as almost every major bank is1), but the lack of fees gives Android Pay a distinct advantage over even their own mobile payment services. This applies pressure to other mobile pay services, Apple Pay included, to drop their transaction fees2.
Another key advantage Android Pay has in the market is their substantial network domination. They represent the largest worldwide share of the smartphone market, as nearly 25% of all smart phones operate on the Android OS3. This offers them a massive advantage, as their network gives them the ability to reach out to a massive customer base to adopt the service. As we mentioned in our previous blogs, studies show that consumers value ease and convenience above all else, and for 25% of all smart phone users Android Pay has automatically become the most convenient, one-stop shop for their mobile pay needs. Even more damning news for other platforms, recent research papers which set out to evaluate mobile operating systems have predicted that Android will further capitalize on its market share to become the dominant global leader in the mobile industry4. If they can leverage the advantage that their network size affords them, they can also dominate the mobile pay market.
Finally, and most importantly, Android Pay leads the market in terms of customer satisfaction. A survey conducted by First Annapolis Consulting found that 61% of Android Pay users were very satisfied with the service, more support than was shown for any other platform5. Despite only being released in 2015, and having no distinct technological advantage over other mobile pay platforms, Android Pay is quickly levying their substantial network size to become a market leader in mobile payment.
Footnotes
1 Betters, Elyse. (2016, Feb 8). Android Pay Explained: How it works and where it’s supported. Pocketlint. Retrieved From http://www.pocket-lint.com/news/135017-android-pay-explained-how-it-works-and-where-it-s-supported
2 Mamiit, Aaron. (2015, June 8). Google’s Android Pay Will Not Charge Transaction Fees: Now What, Apple Pay? Tech Times. Retrieved From http://www.techtimes.com/articles/58654/20150608/googles-android-pay-will-not-charge-transaction-fees-now-what-apple-pay.htm
3 Jones, Chuck. (2016, Feb 21). Apple’s iPhone: Market Share Vs. Profits. Forbes. Retrieved From http://www.forbes.com/sites/chuckjones/2016/02/21/apples-iphone-market-share-vs-profits/#8ea81db46f86
4 Gandhewar, Nisarg & Sheikh, Rahila. (2010). Google Android: An emerging software platform for mobile devices. International Journal on Computer Science and Engineering, 1 (1), 12-17. Retrieved From http://www.enggjournals.com/ijcse/doc/003-IJCSESP24.pdf
5 Boden, Rian. (2016, Sept 5). US Study reveals increased use and awareness of Apple Pay, Android Pay and Samsung Pay. NFC World. Retrieved From https://www.nfcworld.com/2016/09/05/347010/us-study-reveals-increased-use-and-awareness-of-apple-pay-android-pay-and-samsung-pay/
