November 25, 2014

Google Wallet vs. Apple Pay: How Will You Pay for the Holidays?


Hostway Team

Digital wallets like Apple Pay and Google Wallet could provide a secure payment alternative for holiday shoppers this season. The holiday shopping season is just around the corner and there are a number of things retailers should do to prepare. One aspect many companies still need to address is the range of payment options customers will seek to utilize as they purchase gifts.

Although Google Wallet has been around for some time, its popularity is on the rise thanks to similar emerging technologies. One such system is Apple Pay, the new digital wallet feature included on Apple's recently released iOS 8. Tech Times contributor Nicole Arce noted that Google Wallet, an Android mobile payment system, was first on the market, but didn't see the mass utilization many were hoping for. This may change as Apple's new technology heralds an age of widespread consumer use of mobile payment systems.

"[C]onsidering Apple's influence and track record of changing consumer behavior, Apple Pay could finally make secure mobile payments more mainstream," Arce wrote.

With the holiday season quickly approaching, retailers need to be aware of these emerging technologies, how they work and what it will mean for their business. Let's take a look at two of the most popular systems today: Apple Pay and Google Wallet.

The basics: Google Wallet
According to Google, the company's mobile payment option is a secure way to pay for goods and services. It can also be used to send money to recipients both online and within brick-and-mortar stores. The system features Google Wallet Fraud Protection, encryption protection, and can be remotely disabled should the app or physical card linked with the account be lost or stolen. The program also includes a four-digit PIN used to unlock the application and send funds. Users can also benefit from the system's notifications, which alert both the sender and receiver when money is transmitted.

The basics: Apple Pay
Apple Pay is comparable to Google Wallet in that it allows for transactions online and in physical retail locations. Apple Pay also features a range of security measures to ensure protected financial transfers, including using the Find My iPhone app to suspend the program or completely wipe the device. However, as opposed to Google Wallet's PIN system, Apple Pay enables users to utilize the phone's Touch ID biometrics system, as opposed to just a passcode.

The technology behind digital wallets
Both Apple Pay and Google Wallet leverage near-field communication technology to function. This allows device owners to simply hold the NFC antenna their phone is equipped with near a retailers' contactless reader to make a purchase. Currently, a number of companies accept NFC payments, including restaurant chains like McDonald's and Subway, retail stores like Foot Locker and Macy's and drug stores like Walgreens. As this type of payment option becomes increasingly popular other businesses are very likely to begin to accept it as well. However, they will have to equip their websites and physical stores with the necessary hardware and e-commerce software solutions to allow for this type of payment.

The potential for a secure alternative
Tech CheatSheet contributor Nathanael Arnold noted that it will likely be worth merchants' time and effort to allow NFC payments of this kind, as they present a more secure alternative to debit and credit cards. Especially in the wake of the numerous security breaches that took place during last year's holiday season, consumers are exercising more caution than ever this year.

In fact, a survey from found that 45 percent of the 865 respondents said they would "definitely or probably" not shop with retailers that have been the victims of data breaches. In addition, 16 percent said they "definitely would not return" to a hacked retailer.

As many breaches in the past involved the theft of payment card numbers via infiltrations of point-of-sales systems, NFC technologies could provide peace of mind for careful consumers. Arnold pointed out that despite some glitches with the rollout of the system – including Bank of America customers being double charged when using Apple Pay – the security potential could bring increased profits for retailers this holiday season.

"A few technical hiccups during the launch of new payment system[s] is to be expected, and they are fairly inconsequential compared to the peace of mind that Apple Pay's security features could offer to consumers who are worried about having their card data revealed by hackers this holiday shopping season," Arnold wrote.

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