Monday, November 3, 2014

Apple Wallet Vs. Google Pay

The title is not a typo. Bear with me to make my point clearer.

First, The Problem Space

The way I see it, A mobile payment needs to achieve below functionalities to be successful and more importantly a game changer:

  1. Provide a seamless & easy-to-use digital way to consumers to make a online or in-person purchases, without the need to carry a bulky wallet
  2. Provide a seamless, easy-to-use digital option to make personal payments to other users; friends, family, coworker etc. occasionally
  3. Reduce the cost of these digital transactions; right now the industry uses several players between a payee (user) and paid party (another user or merchant) involving Credit card Companies, Credit Card Gateway, Payment Card issuing bank, Merchant banks etc. etc.  who altogether stack up a ridiculous margin up to 4-5% for each transaction
  4. Speed up the Transaction Time - From the time you swipe your card or click 'submit' , it takes at least 3 days time for these myriads of partners to effect a payment. Does this really need to be that slow in this age ?
  5. Be Secure.

The Apple W(P)ay

I was really excited to hear the leaking news before last months' announcement that Apple would again come up with a better way of doing things. After all, Google, Paypal etc. have tried this and haven't been able to move the needle yet. Needless to say, I was waiting.
The Apple Pay, though a great start to vigor the industry, unfortunately didn't' appear to be quite a game changer I had hoped for.

Here are my observations against the 5 problems I highlighted earlier:

Google Wallet

I bet majority of you haven't yet heard of Google Wallet (will abbreviate to GW). If there is ever a Worst PR Campaign awards, that should undoubtedly go to Google, that's because for a search Giant, they did a terrible job advertising their own service albeit a good one.

Below are my observation on Google wallet agains the same criteria:

Promise and Potential

Google Wallet covers most components of a payment infrastructure. It has the potential to cut the middlemen out (e.g. credit card companies, payment gateways, credit card issuing banks etc.) as it connects two consumers with their banks directly. This should definitely drive down the cost and drastically reduce the transaction time as the adaptation rises.

Apple Pay has even better potential since it has better clout over these different players but for that it needs to broaden up its scope and think beyond  'doing it better' strategy.  Otherwise Apple Pay will remain a simple Wallet service.

And That's Why Google Pay and Apple Wallet for now..

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