A Primer on Google Wallet and Android Pay

Description: Android Pay is essentially a digital payments system that consumers can use to buy things online or in stores from retailers and others who also use the service.

Source: www.nytimes.com

Date: May 28, 2015

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To use Android Pay, smartphone users with up-to-date versions of the Android operating system will be able to load Visa, MasterCard, American Express or Discover cards onto their phones. From there, they will be able to wave the phone over the terminals in more than 700,000 stores around the United States to pay for items. Android Pay will also work inside mobile apps from participating developers.

Google will use a technology called tokenization to provide merchants with a customer’s payment information without having to hand over their actual credit card number.

As with Apple Pay, Google will let customers verify their identity using their fingerprint, a technique which will be built into the next version of Android.    Read Rest of Story 

 Questions for discussion:

1.  Will this new payment system succeed “ANDROID PAY”  Why or Why Not?

2.  What is the business model of both Android Pay, Google Wallet or Apple Pay?  Is it sustainable?

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125 thoughts on “A Primer on Google Wallet and Android Pay

  1. Joan G.

    In my opinion this will be very convenient, and it might be successful, even though Apple is dominating the smartphone industry, with Google there’s lots of Smartphone Company using Android as their software, so it probably be successful, but may be not successful enough like what they have anticipated, and it will probably not hard for them to implement it. Like the article said that the only thing left to do is to persuade consumers that these new payment methods are better than paying the same way they have always done — smartphone-free, and with people are always using their smartphones with everything, having one more additional app is not that hard to do. And I would personally use Android pay.

    The business model that Android Pay, Google Wallet or Apple Pay is to provide their customers ease and convenience with not having to use cards (credit, debit, loyalty) and cash. In my opinion this business model is sustainable, with everyone hook with their smartphones, this would not be hard to implement, if they just invest the time to convince most of credit, debit institution as well as the companies that offer loyalty membership to their customer, it will be really nice to just have the your smartphone as your wallet.

    Reply
  2. Gray.yu

    I think this new payment system will succeed. I think this is similar to Chinese AliPay , Mmobile digital payment system. Alipay is also the main free third-party payment software, but he beat his biggest rival unionpay rely on taobao, an Mobile e-commerce platform like Ebay. Unionpay payment system is established, but did not look good in terms of mobile payment. And Alipay can be used in IOS system too.
    I think android pay should be successful, as long as it is able to have enough advantages to attract users, for example, free, multi-platform, convenient and quick.
    And the most important, I think it should cooperate major e-commerce platform, such as Ebay and amazon .As long as the user buy things in the platform, tehy will like this kind of method of payment which is simple and convenient .
    The form of payment are becoming more and more now in mobile payment, this is very important, and the android platform has a wide range of users, but there still is not a very unified payment system. It would be very good if Android Pay can incould the main payment function and financial function like transfer remittance, credit card payments.
    If they can do those ,they wil succeed.

    Reply
  3. Victoria Cao

    1.Yes, I think Android Pay will success because it is very convenient. A lot of companies have membership card. With the Android Pay customers can save room in their wallet and put all the card information into Android Pay. Also with new technology, more and more retails store use scanning code from cell phones as a payment method.
    2. First, they need to connect with many credit card company, and then they need to connect with different companies to promote their payment method to use in the store. It will be sustainable. For example, I have a Starbucks membership card for a year in my Apple Wallet, and I found it very useful. So when I go to Starbucks, I don’t need to bring my wallet with me to the store and I found it very convenient.

    Reply
  4. rahul

    1. Will this new payment system succeed “ANDROID PAY” Why or Why Not?
    The public have always been very skeptical about web security and since recently are the public beginning to get comfortable with online transactions. Android pay using the tokenization system gives a sense of trust in the public since the tokenization system seems to be a modern exploit-free token security system, a sense of trust plays a huge part in whether the system succeeds or not.

    2. What is the business model of both Android Pay, Google Wallet or Apple Pay? Is it sustainable?
    The models of all these seem to be Paypal has dominated this field since a very long time, unless one of Android Pay, Google Wallet or Apple Pay come up with a feature which gives the public a feeling how they ever lived without it the buisness models of both Android Pay, Google Wallet or Apple pay are not very sustainable unless more research and development is put into this particular type of financial systems.

    Reply
  5. Aaron Krein

    1. I do believe that this payment system will succeed. Personally I don’t see how this is overly convenient or innovative. A credit card is already convenient and even if this information is available via my smartphone I would still have my wallet with me. Especially with the introduction of “tap” where you simply wave your credit card and the payment is transferred. It’s also one more thing to rely on your smartphone for; lose phone now and you will also lose your ability to use your credit card. This may not be the view of the majority of consumers but personally I think it is a good thing to have your credit card information separate from your smartphone.

    2. Android Pay allows you to upload your credit card information onto your smartphone and therefore eliminate the need to physically have your credit card with you. Google Wallet is a peer to peer payment system where individuals can quickly transfer funds from one to another. Both of these are meant to create convenience for customers. I do not believe that this business model is sustainable. The whole concept is kind of interesting but I believe it will be short lived, this is because I believe they aren’t really offering anything innovative that will truly create ease for consumers.

    Reply
  6. Daniel Rottger

    This new Android Pay system has a good chance to succeed or at bare minimum provide another stepping stone to the path of purely electronic payment systems. Android already has a quite substantial market share, and has now proved itself to be a major player in the smart-tech industry. This, combined with their ever increasing level of brand recognition, proves to be a good indicator of future success. While this idea is still fairly new and in developmental stages, if android is able to work through their bugs and listen to consumer demands, they could be extremely successful. In todays increasingly non-interactive marketplace, there is only a matter of time before someone gets it right, and changes the way we thing about currency forever.

    Reply
  7. Alicia Turner

    1. Will this new payment system succeed “ANDROID PAY”  Why or Why Not?
    While I believe that the thought of Android Pay is extremely creative, I have a hard time envisioning the success of this payment system. I personally believe that using this android pay system would put too much trust and value into our smartphones which can be easily lost or damaged. While there are many phone enthusiasts, I feel that a lot of people would be uncomfortable with sharing all of that information on a singular device.
    2. What is the business model of both Android Pay, Google Wallet or Apple Pay?  Is it sustainable?
    The business models surrounding these pay systems deal with generating more consumers towards the digital age. The purpose to allow consumers the convenience of being able to pay for the things that they want, when they want them as most of the time, people have their smartphones on them. Is this sustainable? In a way, it could be. While there are not nearly enough android users, I believe that the systems themselves have probably already been created and can continue to develop to satisfy consumer wants.

    Reply
  8. Jaylen Korver

    The system as a whole, I think, will eventually take off. Smartphone payment is the way of the future (for now.) People are always on their cellphones, and having less things to carry is always advantageous. I wouldn’t doubt, at least in our lifetimes, that physical money will eventually become extinct. Everything will be paid for with cards, phones, or chips built into our wrists or the like. There are some skeptics to this new idea of payment, but I think it’s great. To pay with something via your phone, you need your fingerprint, and since you’re unique, its hard for anyone to physically steal your phone and use it to buy stuff. Yes, there is hackers, but stop being a buzzkill! It’s the future!

    The business model of these companies is basically to make it as simple as you can for the end user. Why carry around a wallet full of cards and money, and a smartphone, when it could all be accessible from your smartphone. Even loyalty cards are becoming a thing of the past, as more businesses have apps that you just pull up the barcode on and they scan it right off your phone. More and more people are getting the latest smartphones with this technology, and I think they will soon start seeing the benefits of using Android Pay, Apple Pay, etc.

    Reply
  9. Ashley-Raye Miles

    I believe that these payment systems are very innovative and a good idea. The convenience of having everything on your phone is great for the tec-savvy individuals. For those not tec-savvy an skeptical, it would not be popular because of the fear of leak of personal information and security. Some individuals cannot imagine everything being in one place because what of you lose you phone?! I think this idea is very exciting and the innovation is amazing. I believe that this idea is extremely innovative but that more individuals and businesses have to buy in to this idea so it becomes more popular. Maybe in the future this will grow or popular because of the technology shift and people using more and more of it in their lives and trust the idea more.
    Convenience is the main sell for these payment applications. If people can pay more easily, they will buy more. People can also find this convenience in doing peer-to-peer payments – kijiji anyone?! I think that more individuals simply have to buy into this payment system and eventually in the future it will become more and more successful – maybe it is too soon now and the future holds everyone with a google wallet or android pay – like how almost everyone has a debit or a credit card

    Reply
  10. david.p

    1. Will this new payment system succeed “ANDROID PAY” Why or Why Not?
    Personally, I think there is a chance it will be successful. There are too many phone enthusiasts. The majority of people cling to technology; they like to be “up to date” on technology. People like to outsource things that are old, even if they do not particular need outsourcing. The younger generation tends to cling to technology; they would rather do everything using technology. For example: there are not that many differences from the iphone 6 and the iphone 5. People just like having the latest gadgets. One disadvantage of this would be apple, as there are just as many apple fans compared to androids.
    2What is the business model of both Android Pay, Google Wallet or Apple Pay? Is it sustainable?
    The business model is most likely to provide consumers with a more efficient and effective way to buy things. I believe it is sustainable because apple and android are both well known brands and will continue to excel due to people who are more brand oriented. They could possibly be a threat to PayPal in the future.

    Reply
  11. Matt Hickerty

    Will this new payment system succeed “ANDROID PAY” Why or Why Not?

    I feel that that the system, while it may seem convenient, will not succeed. With almost all credit and debit cards that have the “pay wave” or “tap” feature that comes with them, I just don’t see android users loading their credit cards onto their phones so they can use their phones to pay instead. The security feature that comes equipped with Android Pay is a great idea, much like Apples security feature, but again I just don’t see it being as successful as they hope it will be. On top of that, I know this happens with my phone, and I assume it happens with many smartphone users, is that phones tend to run out of battery, this would clearly cause an issue as there would be no way to pay for anything if you had a dead phone. I’m not saying that no one will use this new payment method, there are plenty of people who love to be as technologically advanced as possible, so they will acquire some users, but it won’t be a huge success like PayPal is.

    This model, in my opinion, is not sustainable. There are too few Android users in the digital world as of today, and more importantly, most of them are younger adults, who either don’t have a credit card, or just won’t use the feature. I don’t even think Apple Pay is a sustainable model, they should stick to just selling their products.

    Reply
  12. Bobby Hamilton

    The new payment system should succeed android pay, due to the considerations in place to prime their previous product. My guess is that a very large percentage of people that have and use android operating systems are associated with either a Visa, Mastercard, American Express or Discovery card. This sets up for a very successful business model, seeing as the partners associated with them have a wide range of users. Money will always have to be the focal point of our economy and the fact that they are making spending money simpler for people is a good quality to endorse.
    Loyalty programs are also a good opportunity for a business model. Being able to offer certain rewards or bonuses to loyal customers, will keep them coming back. It will provide a competitive advantage over apple.
    The fact that these companies are setting themselves up with similar business qualities as the other will up the competition amongst them all. Then they must persuade them that their mobile application is of quality to their customer. Once there, the customer will have to decide which company to purchase from. I know that most people who buy apple products, continue to buy apple products and vice versa for android products. They are successful companies with successful business models.

    Reply
  13. Lukas Grasse

    This system will eventually be adopted by a majority of people I think, as Android and IOS have a large share of the operating systems on smartphones. The interesting thing is, I think this will succeed in Canada a lot quicker than in the US. If you think about how quickly most merchants have upgraded to interac flash, and visa paywave already, the infrastructure on the merchant’s side is mostly in place. In the US, they haven’t even been able to get chip and pin to everyone yet, and Canada has already implemented contactless payments at many locations.

    As far as the business model of these systems, my guess is that most of the income would be from loyalty programs, as the cards and transactions are still managed by visa, mastercard, or American Express. The business model is fairly sustainable I think, but it will probably take some time to work out the best way to integrate the loyalty programs. With Facebook and Twitter for the longest time it was hard them to figure out how to make money with mobile advertising. The advances make in mobile advertising in general however, will probably help the loyalty programs to be more of a success; and since people use their smartphones for a wide variety of things, there is lots of value added in data from the platform and other apps.

    Maybe they could also take a fee on top of Visa or Mastercard’s fee, but traditionally merchants have paid the fee for transactions, and in order to get support of these systems they probably won’t tack on a fee as well. I think it would also be a bad idea to charge the client as most people expect it to be covered by the merchant. To increase adoption, it will probably just take the place of the physical card, and not take on the responsibilities of the major credit card companies.

    Reply
  14. Brittany Doell

    1. Yes I do think that Android Pay will succeed, but not as much as they are anticipating. The reasons that I personally think that it won’t succeed as much because many people use iPhones and so that is a large market of people on its own that wont be able to use it. It can also be inconvenient if you are replying on it and your phone dies. I think for that reason alone a lot of people wont use it. Since people aren’t able to fully rely on the app, people will still have to make sure that they have other ways of paying with them. Personally, I already find paying for things with a debit or credit card. Using the tap function makes paying quick and easy.
    2. The business model for all of these is to provide their customers ease and convenience with not having to use credit cards, debit or cash. I think that if they paired up with phone companies and had promotions when people first buy phones, it could increase the amount of people using the app. This way, the people that usually buy an iPhones, may be persuaded to get an android instead if they were aware of the app at the time of purchasing the phone.

    Reply
  15. Megan Melvin

    Will this new payment system succeed “ANDROID PAY”  Why or Why Not?
    Android Pay will likely succeed, but may take some time for developers to iron out the kinks involved in any new application. Consumers will enjoy the convenience of using their smartphone to make purchases without having to type in credit card numbers each time a new transaction occurs. Consumers are always going to have concerns about the security of their personal information, especially when their finances are involved. It is likely many will have questions and doubts in the secure of storing this valuable information on their smartphones, but Google will likely be able to answer and provide assurance and the adoption of this new method of payment will increase over time as more consumers become aware and informed.

    What is the business model of both Android Pay, Google Wallet or Apple Pay?  Is it sustainable?
    The business model of Android Pay and Google Wallet is essentially to provide the consumer with a convenient way to store credit card information and make purchases both online and in stores that accept the payment system. It is sustainable because it has already been done. PayPal has been the leader in this technology for years, and will likely fall behind as Apple and Google take over because they are the dominant providers in the smartphone industry. More users of PayPal will likely switch to Android Pay, Google Wallet, or Apple Pay simply for the convenience of it already being on their phones.

    Reply
  16. Travis

    1. Yes I believe it will succeed for it maximizes convenience even further than was previously capable. It is also targeting the current trend of smart phone users today. A fingerprint scanner (plus various other security functions) too is a wise choice to promote the products privacy. This too will help protect users hopefully better from identity theft. If one were able to have a credit card as another app it makes it more accessible and user-friendly to consumers benefiting both Android and credit card companies. Due to the current fad of smart phone technology Android Pay will likely catch on.
    2. Firstly android pay must get approval from several major credit card companies and reach an agreement on prices. Next Android Pay must rely on businesses to upgrade technology to support their new android pay system. This could become an issue if expenses are higher than the current demand for the product. Competition is also potentially a killer for Android Pay if PayPal or Apple pay step up their game. The rewards system Android pay is beneficial and will help give Android pay a competitive edge. Android Pay will be sustainable if they are able to get credit card backing and are able to compete with similar products.

    Reply
  17. Billie loder

    1. I think Android will succeed. it may attract more people to the android phones if they like that particular feature. personally I would not used android pay. I am always misplacing my phone and I leave it everywhere. I would be scared someone would be able to use it. As well my phones dies within a day so what if my phone is not charged to use the feature and I just so happened to leave any other method of paying at home. I am way too sceptical of a person to be that trusting in my phone.

    2. this service is sustainable. it will have a large market for it. there is always going to be people who is skeptical of it and it may not become how popular the debit card became. Who knows though maybe one day we wont even have debit or credit cards anymore, maybe everything will be held on our phones. If these companies want to broaded their market they need to make consumers more aware of their product and how to use it properly and any security measures they use to keep the consumers safe

    Reply
  18. Bryce Baker

    1. Will this new payment system succeed “ANDROID PAY”  Why or Why Not?
    I certainly wouldn’t leave my bank cards at home on account of this new application. Primarily because smartphones have habits of dying when left uncharged. According to this brief article, I don’t see any new convenience coming of this. We already have the technology to tap our credit and debit cards for instant purchases. I certainly wouldn’t use this app if they didn’t implement the fingerprint security they were discussing. There may be some benefits that I cannot think of at the moment and that the article never discussed, but at this moment I don’t believe this will be a successful venture.

    2. What is the business model of both Android Pay, Google Wallet or Apple Pay?  Is it sustainable?

    The business model of these companies is essentially focused on the sole intention of bringing consumers deeper into the digital age. They are constantly racing to be the first ones to perfect a new technology, and most of them just focus on what their product does and they forget why, or may not even know why they’re doing it. But their model isn’t extreme, their target audience is everyone with a smartphone, which is everyone I personally know, besides my grandmother who (according to me) is the last person on earth still using a landline. If they can convince people that they need this and why they need it, then perhaps it can be sustainable.

    Reply
  19. Mark Hoshowsky

    1- In my opinion Android Pay will succeed, but not to the extent some may think. Some people may find having a way to pay for purchases on their phone as a huge convenience, and therefor use applications like Android Pay. But the Android Pay isn’t available for everyone; people who prefer to use Iphones represent a large market segment that will never use Android Pay. And then there is another portion of the population that does not feel the need for a payment method on their phone. I am part of the population that feels no need for a payment method on my phone. I am more than content with the convenience of chip and tap technologies on debit and credit cards now days, and do not feel the need to go through the extra hassle of signing up for applications such as Android Pay. Another thing to consider is what happens when you are by yourself with no payment methods and your phone dies or quits working?
    2- the business model for Android Pay is to increase payment convenience for Android users. I do not see this as a sustainable business model without substantial modifications. To me it targets too small of a customer base, which is young Android users.

    Reply
  20. Esther S

    1. It could. Because Google’s Android operating system accounts for about 80 percent of smartphone market, they would be able to reach out to more consumers. However, android would still have to deal with those retailers who do not accept mobile payments as a form of payment and also to those who would rather pay with cards or cash.

    2. The business model for these companies is to provide convenience, comfort and ease to consumers when buying and paying for items rather than using cash and/or debit and credit cards. It could be sustainable if they are able provide more ease to their products, allowing the consumers understand the concept of said products even better, offer promotions, improve on security to build trust with the consumers etc.

    Reply
  21. Taylen Oancia

    1) I believe that this new Android Pay system will succeed or at least help further develop the ease in which people can pay for things electronically. The Android Company already has a good market share, is a well-established company, and most importantly has a very large amount of brand recognition, which I think will help this idea succeed. Although there are many challenges with the connectivity between phone brands, as well as user-friendliness issues that make Apple better than Android, I believe that this service can fill a crucial niche role in today’s increasingly digital marketplace.

    2) The focal point of Android Pay, Google Wallet, and Apple pay is all largely the same; it is focused on bringing convenience to the customer. They are trying to bring easier and faster transactions across many different types of sales, cutting down time spent paying and making things easier for consumers. I believe that this technology, although new, is certainly sustainable as long as it evolves with the marketplace. Many people today have switch from cash to credit swiping, and from swiping cards to tapping cards; the successful implementation of Android Pay or a similar service is simply the next step in the digitalization of the marketplace.

    Reply
  22. Chris Hansen

    The idea of not having to replace my entire life when I lose my wallet excites me. The thought of someone hacking or stealing my phone and using my Android Pay terrifies me. I don’t really understand how this is much different from the old Google Wallet. Maybe it’s a bit safer, and maybe it’s a bit easier to use, but I don’t know if that was ever the issue. This may not be the only reason, but my issue is relying on a smart phone.

    Firstly, my phone dies all the time. It’s only a year and a bit old, but the battery is awful. What if I’m out at a restaurant and my phone dies? Do I ask for their mobile power station? No. I pull out my wallet because I brought it anyway, because I knew this would happen. So, if I have my wallet anyway, what’s the point? It doesn’t seem to be much faster. Secondly, there are still smartphone privacy issues. If the NSA or whatever can listen to my calls, why can’t they take my credit card information. I mean, they probably have it anyway, but the point still stands. Until they can target these issues, I don’t think any phone-based wallet will be successful.

    Reply
  23. Lindsey Hughson

    I think that Android Pay will succeed because Android has a large customer base and it offers integration with loyalty programs which is something that Apply Pay does not offer. There are probably a lot of people that do not want to carry around their wallet and would prefer to pay with their phone. The only question is how large of a group of people is that really? I am not one of those people. The tap and pay technology already in cards seems like a liability. However, I am probably the exception and not the rule.

    These services work similar to the touch and pay system implemented with debit and credit cards. The difference is that these cards are loaded onto your phone so that you only have to wave your phone over the machine. This means that consumers no longer would have to physically bring their cards with them. There is also fingerprint verification to increase security. The success of these businesses is based on offering a service that not many others are offering. This is not sustainable because other companies will come along with their own versions, perhaps even better versions. In order to remain successful, they will need to continue to offer perks that the others do not to maintain a competitive advantage. This is what Android Pay currently has done by offering the loyalty program integration which Apple Pay does not offer.

    Reply

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