Comparing Apple Pay, Android Pay and Samsung Pay
By Dawn Papandrea
September 23, 2015
Apple, Google and Samsung are all jostling to be the dominant mobile payment technology consumers turn to. Yet, none appears to have pulled ahead in the race to win over consumers, and each mobile payment system has its pros and cons.
Here is a closer look at three of the biggest players in the race to make your smartphone a more popular way to pay:
Like anything that has a lowercase “i” in front of it, Apple Pay is a trendy way to pay. There's some fancy technology under the hood: To secure its payments, Apple Pay uses a short-distance radio communication technology called near-field communication or NFC. Plus it has fingerprint verification. Plus digital tokenization.
Digital what? Cameron Camp, a security researcher at ESET, a maker of security software, explains: “When a user goes to make a payment, his credit card company sends a randomly generated 16-number token or code to his iPhone as a stand-in credit card number.” Apple Pay also can be used with select apps.
Pros: With Apple Pay, your credit card number is never shared with the merchant, meaning that in the case of a potential retailer data breach, your credit card information won't be accessible. This payment choice is supported by 2,500 banks and credit issuers. And if you're a Discover cardholder, using Apple Pay will get you an extra 10 percent cash-back bonus through the end of the year.
Cons: Apple Pay is an option only for iPhone 6 and Apple Watch users. Also, just 700,000 locations currently accept Apple Pay since it requires NFC terminals, and most merchants are still using older terminals that require a card swipe.
Google introduced Android Pay earlier this month. Incorporating elements of Google Wallet, which has been around for years and still has its fans, Android Pay also uses NFC technology but relies on software that's built into Android phones to make a contactless payment at NFC-enabled terminals.
(New mobile payment technologies) can provide opportunities for loyalty, rewards, discounts and savings, and can add value by helping consumers make sensible decisions.”
— Vikram Parekh,
assistant vice president of product management at USAA Federal Savings Bank
Pros: Android Pay also protects your data using a token-based system. What sets this option apart, however, is that roughly 80 percent of Android phones will be capable of supporting mobile transactions, says Vikram Parekh, assistant vice president of product management at USAA Federal Savings Bank.
Cons: As it rolls out, Android Pay will only be available at more than 700,000 store locations, and within 1,000 or so Android apps. Also, Android devices are usually an easier target for cybercriminals since they tend to be more vulnerable to attacks than Apple, especially if users do not install virus protection software.
Rolling out next week, Samsung Pay is a mobile payment option that also uses NFC technology, and it also will be protected by fingerprint verification and digital tokenization.
Pros: Samsung Pay is the first to crack a tough technological nut — the swipeless swipe. (Magnetic Secure Transmission technology emits a magnetic signal that mimics the magnetic strip on a traditional payment card.) This makes it a more versatile payment option since it will be able to be used at 30 million locations.
Cons: Samsung Pay can be used only on a handful of devices: Samsung Galaxy S6 Edge +, Samsung Galaxy Note5, Samsung Galaxy S6 edge and Samsung Galaxy S6. Samsung Pay, at least initially, will not be available for in-app purchasing.
Added convenience and security
All the new mobile payment technologies boast convenience, perks and an added layer of security. And as the conversion to new payment technologies occurs, Parekh says to expect more two-way communication at the time of transaction that can improve the consumer shopping experience. “It can provide opportunities for loyalty, rewards, discounts and savings, and can add value by helping consumers make sensible decisions,” he says.
For instance, he predicts that shoppers will be able to set up push notifications to alert them if they are close to reaching the spending limit they set.
On the merchant side, acceptance is moving more slowly, says Parekh. Retailers currently are investing in upgrades to their payment terminals to accept newer, more secure chip cards ahead of the Oct. 1 EMV (Europay, MasterCard and Visa) migration deadline.
Right now, scammers are noting which platform gains the most popularity, because it would represent the maximum payout for their exploiting effort.”
— Cameron Camp,
a security researcher at ESET
Fraudsters are watching
In order for mobile payment technologies to succeed, they need to stay ahead of financial fraudsters, says Camp. “Right now, scammers are noting which platform gains the most popularity, because it would represent the maximum payout for their exploiting effort,” he says.
Also, there is a lag time in user education when a new payment platform is introduced. “Everyone has a family member who clicked on every suspicious email on their PC until it froze and got infected, but then they learned what to watch for and what not to do,” says Camp. “We haven't yet seen that learning process equivalent on mobile payment platforms which would galvanize users' habits.”
Riding the mobile payments wave
Consumers and merchants – especially those who are early adopters to new technologies – have been testing the mobile payment waters. What should they be on the lookout for?
“Consumers should look at how long a technology has been around, how many times it's been updated and the security precautions the vendor takes,” says Camp. He also recommends speaking to your bank to find out what service they recommend, since many partner with a provider for added security and authentication.
As for where payment tech is headed, Parekh says mobile payments will eventually become mainstream, just not all at once. “In some places, there will be value added in terms of experience, so that is going to help move the process along,” he says.