Karthik Raghavan ist program director of digital acceleration zum BMO jae won Group. He has 8+ years des experience with financial technology.

Du schaust: Google pay vs apple pay

Apple (AAPL) and Google (GOOG) brands accumulate almost spiritual devotion an their loyal consumer who lakers comparisons between the two tech giants together a comparison betwee apples und oranges. Wie man it come toApple PayandGoogle Wallet, our preliminary findings said they are mostly similar offerings: apple Payappears easier to use, while google Wallet has actually a few more features. Additional digging reveals that this is literally bei apples vs. Green-robot-persons comparison!

The Basics

Both Wallet and Pay kann sein be used for online purchases right from bei app or website, automatically handling die entire checkout process with pre-filled defaults and only requiring pin or Touch i would verification kommen sie complete the transaction.From in industry point of view, ns most far-reaching breakthrough that such cell phone payment systems makes is an security, and here Apple und Google both incorporate part pretty nifty tricks.


Credit map fraud has been a significant problem in the U.S. As banks and retailers work to upgrade your platforms, cell phone payment systems like Pay and Wallet may actually allow the U.S. Kommen sie leapfrog to ns forefront des payment security.

While both system appear kommen sie be same robust, die two companies do take different approaches that form what their commodities can and cannot do. Zum the consumer, the use von Touch i would vs. Pin Authentication is the many visible difference, however behind the scenes, there zu sein a gewächs more walking on. Many important ist the reality that neither system reveals the user"s card details to the vendor.

With both systems, ns user"s card einzelheiten are listed only once, throughout the frühen zeitpunkt setup. Google adopts an intermediary role and saves her card einzelheiten on your servers. They then concern a online card zu your device, the google Wallet digital Card. When paying, ns device just transmits this online card. The vendor never sees your real card, which zu sein safely protected by Google"s own secure servers. When ns virtual card is charged von the seller, Google in turn charges her stored debit or credit transaction card, being die only entity that ever sees your echt card with this transaction.

Apple employs a different system known together Tokenization. Here, wie man your card details are noted to the device, it contacts the issuing bank directly and upon confirmation receives a device und card specific kündigungscode called die Device Account Number (DAN) that ist stored top top a certain chip on die device. Ns DAN structurally resembles a credit card number und is the thing that ist passed top top to die merchant wie man any payment is made, und authorized in the usual method with die bank.


This seemingly small distinction makes all die difference. Since google acts as bei intermediary und stores her card details on its very own servers, that does notfall need kommen sie worry about making any deals with the banks and practically any type of card can be added to your google Wallet. An fact, you can even include loyalty cards und gift cards kommen sie your wallet, and send und receive money that can be stored in the Wallet und used straight without entailing your bank.

In every single way, google Wallet tries kommen sie replicate a real wallet in the virtual world. Deshalb much dafür that google even tracks her transactions, saving order details, nearly as if you stuffed her receipt into your wallet. This säule will it is in used, similar to all säule on Google, zu serve sie ads that matte to you, which feeds directly into Google"s business model. Bei keeping through its function as an intermediary, google offers 100% defense with its google Wallet Fraud protection policy.

Apple, on the other hand, clearly declares the it wollen never track her transactions. In fact, apfel won't even store your card einzelheiten on their servers or on ns devices. All sich entschuldigen does is transmit your card to the bank, authenticate with die bank and receive und store ns DAN that the bank sends back.

Apple ist not a payment intermediary, und is rather positioning itself as, true zu its name, a payment medium alone. Bei essence, in Apple Pay allowed phone is an expensive und beautifully crafted credit transaction card; one that tun können be lost or end up being useless if die phone battery dies.

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Though fingerprint injektion security and the ability kommen sie remotely disable the phone offer fairly a bit des protection, if someone does acquire access kommen sie your apply Pay phone, you have to take it up the issue v your bank and not Apple.

This approach so means sich entschuldigen must negotiate faces banks und get them zu sign-up for the payment revolution, a job that has actually limited die number von cards that kann sein be provided with apfel Pay at die time of launch. Notfall tracking transactions also means apfel has no way to monetize ns user, und therefore that charges a per-transaction fee zu the bank that it partner with, despite the details of this fees structure stay somewhat murky.

Questions Unanswered

Things gain even much more confusing when one marvels why bank will pay a per-transaction fees to apple when Google"s technique costs them nothing. Perhaps sich entschuldigen has managed kommen sie convince them the its customers will einkaufen more with apple Pay, or perhaps bank believe that they gain bei exclusivity benefit over banken that are notfall partnered through Apple. Or maybe apple just go a much better job than google at coordinating the different stakeholders involved bei such a complex und intricate network.

But in spite of Apple"s significant clout, all ist not yet well v mobile payments. A consortium of vendors recognized as ns Merchant Customer exchange (MCX) that includes, amongst others, Rite assist (RAD), CVS (CVS) and Wal-Mart (WMT), oase declared that they will not adopt either sich entschuldigen Pay or google Wallet. Instead, they space working ~ above their very own alternative, CurrentC, which wollen save them significant amounts von money über charging a customer"s bank account straight instead des paying transaction fees to payment processors prefer VISA (V) und MasterCard (MA).

Neither google nor apple offers much to die vendors zum adopting their systems; although at the moment the CurrentC system zu sein very clunky, requiring the user to take a picture des a QR Code to pay, make its success winning consumer seem unlikely.

The Bottom Line

Apple salary claims to be "your wallet without ns wallet," a description that, in truth, fits google Wallet better. Und Google Wallet phone call itself "an much easier way zu pay," which in all fairness zu sein what Apple's ought zu be saying. Zum the consumer, both systems make young improvements in convenience and dramatic improvements bei security. Zum the industry however, the tradeoffs are blieb very unclear.


A mobile payment ist a payment made zum a product or service through a portable electronic device such together a tablet or smartphone.
Apple Pay is a contactless payments system created by apfel and an use von over 440 million customers.

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Contactless payment allows cardholders to tap payment cards against a terminal kommen sie complete a purchase rather than using a PIN.