Mobile Payment Methods & Android Pay

Intro – 60 second guide

Here are our findings on the recent news of the introduction of Google’s Android Pay, supported by the big Australian banks and what this means for consumers. There are more key details in the following article below.

  • In today’s announcement Android Pay, a Google-backed micropayments product is set to be launched in Australia for android smartphone users.
  • Google has previously tried micro-payment methods, but this is the first time they are integrating with the Android operating system.
  • Android Pay is being used by more than one million retail stores across the United States for contactless payment transactions, since launching in early September.

Australian banks supporting Android Pay

As announced in the news today, Australian banks have chosen to snub Apple, in favour of choosing Google’s Android Pay as they move forward in the first half of 2016 and as they support emerging technologies in the payment processing industry.

Apple is reported to be trying to salvage their bid to grab a share of the Australian banks dwindling merchant card fees.

Today’s deal announcement with Google means that Australia will become the second country where Android Pay will be rolled out after it was launched earlier this year in the US.

Of the Australian banks and financial institutions involved in this announcement, those participating are: ANZ, Westpac, Bendigo, ING DIRECT, Macquarie Bank and Cuscal are also included in the list of six banks.

Cuscal Australia is a card issuer and processor for over 70 Australian lenders. They will be amongst the first to provide Visa, MasterCard and EFTPOS on Android Pay.

Of the six banks, Westpac already has their own digital wallet finance product which can be used to make payments via selected Samsung smartphones, but Android Pay will be the first Australian product which can be used to hold multiple credentials from different banks.

Android operating systems in Australia currently account for almost 55% of the market compared to 37.9% which is held by Apple’s IOS backed smartphones.

What does Android Pay offer consumers?

The Commonwealth Bank of Australia has yet to decide if they will support Android Pay or not, the reasoning behind this is they currently have their own smartphone App which allows users to pay in person from any Android phone.

Google’s Android Pay will not require users to enter a PIN code at the time of payment, while The Commonwealth Bank’s application requires users to both unlock their phone first, then enter a PIN code before tapping to pay.

This is not the first product which Google has tried to offer in the micropayments space. An earlier precursor to Android Pay was known as Google Wallet and was thought to have failed due to similar security processes, which are evident in Android Pay.

“Android Pay offers clients a simple and secure way to make payments using their Android phone, as well as the convenience of storing gift cards, loyalty cards and special offers on their phone,” – Macquarie Group deputy managing director Greg Ward.

What are contactless payments?

The mobile payments landscape in Australia has had contactless mobile payment methods in place for at least the last 5 years, with Australia being one of the leading countries utilising contactless payment systems in everyday life.

According to data released by Westpac Bank, research has shown that 60% of all Mastercard and Visa credit and debit card transactions are conducted as contactless payment transactions, with the recent movement towards contactless smartphone payments set to increase.

Visa PayWave has long been an innovative contactless payment method in Australia, which enables consumers to simply wave their smartphone in front of the contactless payment terminal to make a payment.

One of the biggest barriers for merchants in other countries, for example, the United States, is that they still don’t have the technology to accept contactless payments. By contrast, here in Australia, almost 70% of credit card transactions are now tap and go.

With the introduction of Google’s Android Pay and Apple Pay, this is bound to grow in number. While mobile smartphones being used as a method of contactless payments is still in the infant stage, this too is sure to grow as consumers become used to the new payment method.

What is Android Pay?

Android Pay was launched in the United States in May to much fanfare and allows consumers with Android operating smartphones to make payment transactions via their linked debit and credit cards, by swiping their mobile phones past contactless transaction scanners.

In the U.S since the launch of Android Pay, more than one million retail stores have begun accepting this as a method of payment from consumers, converting cash registers to being equipped with NFC technology, allowing contactless payments to be conducted.

Users of the App will also be integrated with Googles other Android services which include food delivery startup DoorDash, supermarket delivery service Instacart and ride-sharing company Lyft.

Google has announced that in Australia it will be offering incentives for consumers which take up the use of Android Pay. This will include $10 off a DoorDash delivery and $10 off a user’s first Lyft ride.

In Summary

Android Pay will no doubt be the future of contactless mobile transaction payments in Australia, thanks to the application on offer by Google. With Android Pay consumers will be able to use their smartphone or other handheld device in stores and simply swipe at the checkout scanner to make their purchases.

With a smart focus on simplicity, security and convenience, it’s sure to be a hit with Australian mobile phone users. Android Pay will not need users to open any App, so it’s sure to be the new hassle free method of making purchases.

Personal card numbers and the information is never shared with stores during the transaction process, which Google has stated is done on purpose to assist with security.

Already Australian merchants such as McDonald’s, 7-Eleven and Telstra are set to begin accepting Android Pay transactions within the next 6 months.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.