2016 is looking to be the year that mobile payments finally catch on. Android Pay and Samsung will both be launching in Australia, while Apple and the big banks have had mobile payments available for some time now.
While all of deliver the same result – you paying for a product with your phone – they differ in how it happens.
As you might expect from the name, Apple Pay is only available on Apple products, in particular the iPhone and Apple Watch.
But as it stands, to make it work, you need to have an American Express card – one issued by Amex, not a bank – although it’s expected more partners will join this year. Currently Australian banks are stuck in a stalemate with Apple, which wants 15c for every $100 worth of transactions.
In terms of security, Apple has a three-pronged approach, using your fingerprint for authenticity, a separate chip to hold your credit card details and tokenization for transactions.
Tokenization is where, instead of sending your card details to the number, it replaces it with a randomised number and a device specific, one-time use authentication code.
With Apple Pay you can add reward cards and stores can add their own programs to earn points through the app.
The transaction itself works by using NFC technology, which most tap-and-go terminals in Australia use. To use it, just wave your phone over the terminal and put your finger over the fingerprint reader to authenticate. Easy.
This is Google’s mobile payment system for any Android smartphone that has an NFC chip and runs Android 4.4 or newer. This could be anything from the Samsung Galaxy S4 to a HTC One M9. Unlike Apple, Google has managed to sign up a few banks for the launch in the first half of 2016 because it doesn’t want to take a cut of the transaction fees:
– Bank of Melbourne (Westpac)
– Bank of South Australia (Westpac)
– Bendigo Bank
– Cuscal (Including over 70 of their smaller financial institutions)
– ING DIRECT
– Macquarie Bank
– St.George (Westpac)
Like Apple Pay, Android Pay uses tokenization to keep your card details away from dodgy merchants and uses either your fingerprint or a code to authenticate. However, because it’s a software implementation designed for lots of different phones, your card details are stored with your Google account, not a special chip on your device.
Like Apple Pay, stores can add the ability for you to collect rewards and loyalty points through the app.
Using it is very similar to Apple Pay too, just unlock your phone and tap it over the terminal, with no need to go into any apps.
Samsung is advertising its mobile payment system as the most widely accepted in the world, which it is.
While Apple and Android Pay both just use NFC technology, Samsung Pay also incorporates magnetic secure transaction technology. This means that your phone can wirelessly pay for things using the same old magnetic strip that credit cards have been using for years, allowing every terminal to support it. When it launches this year in Australia it will only be supported by the Samsung Galaxy S6/S6 Edge, Galaxy Note 5/Edge+ and the soon to be announced Galaxy S7.
We have no news on which banks will be signing up yet, but Samsung says it won’t be asking for a fee, so expect a similar list to Google Pay with a possible addition of the Commonwealth Bank.
Like the other two, it uses tokenization for transaction while it has the same extra level as Apple Pay does with a dedicated chip in the phone to store credit card details.
Using it is similar to both Android and Apple Pay, you drag up the screen from the bottom before authenticating the transaction with your fingerprint and tapping your phone over the terminal.
Most of the big banks, including the Commonwealth, Westpac and NAB all offer contactless payments within their own apps, although they are only available on Android devices with NFC capability, and Westpac only supports Samsung devices. They all, except NAB, require you to go into the app and login to pay, and all store your card details with your bank account details.
All credit card types are supported by most apps, however NAB at this stage only supports Visa debit cards.
One neat feature that the banks have, which the tech company versions don’t, is the cardless cash feature, allowing you to withdraw cash from an ATM using two codes if you’re with CBA, Westpac or St George.