Google and Apple to adjust their mobile payment offerings

According to the source, both giants are also going head-to-head in mobile payments, as they prepare to push deeper into digital wallets.

Google is set to unveil plans at its annual developer conference on May 28, 2015, for an overhaul of its mobile payment products. Changes include a service called Android Pay that will let merchants accept credit card payments from inside their mobile apps and can be integrated with loyalty programs at retailers. Google Wallet, a mobile commerce app, is also expected to be reintroduced as a peer-to-peer (P2P) payments app that consumers can use to send money to each other directly from their debit accounts.

The source also notes that Apple is preparing to announce details about enhancements to Apple Pay at its software conference in June, 2015. Those include a rewards program for the mobile wallet service.

With more consumers willing to make purchases using smartphones, companies are rushing to take the lead in the market, spurring eBay’s PayPal to heavily market a suite of mobile apps, while startups like Square and Stripe expand their payments processing software to small and midsize businesses.

The stakes are also high for Apple and Google, which are entering mobile payments later than others in the industry. For Apple, mobile payments tie people more directly to its main product, the iPhone. For Google, payments are a hook to reel people into its ecosystem of services and another way to gain insight about consumers.

Google’s new Android Pay can also be used at brick-and-mortar stores in addition to letting merchants accept credit card payments from their mobile apps. Consumers who use Android Pay for a purchase will also automatically add points to loyalty programs run by participating retailers. The revamped Google Wallet will be available for Android and iOS devices.

With its revitalized payments push, Google now is working closely with credit card networks, card-issuing banks and payments processors, the source highlights. Retailers, too, are more eager to accept mobile payments products that work with their loyalty programs in order to gain insight into customer shopping habits.

Google has the opportunity to offer its Android payment service to a broad swath of handsets by different manufacturers, while Apple’s payment service is exclusive to its device owners. Yet Google will not be able to control its payment system as tightly as Apple, which could create room for the Android service to break down, the source points out.

Another potential headache for Google is Samsung, the handset maker and the top seller of Android devices. The South Korean manufacturer acquired LoopPay, another mobile wallet competitor, this year. That offering could divide Samsung smartphone users who may have to choose between Google’s wallet and Samsung’s LoopPay product.