If today you pay with a Visa credit card, for example, Visa earns a commission for that payment. We all expected something similar to happen now with mobile payment platforms, since in the end they have agreements with the card entities. However, it is not going to be that way at all, as Google will not charge commissions for payments with Android Pay.
A platform that does not generate money
It's funny, because in reality all the investment that the company has made in Android Pay cannot be amortized, at least directly. And it is that, they will not be able to use the platform to charge extra commissions with which to earn money for each of the operations carried out through Android Pay. Apparently, the company would have been negotiating with both banks and Visa and MasterCard, but it would not have managed to be an exception in the policies of the latter credit card companies that prevent other companies from charging users fees for payments. Everything is striking because Apple is going to make money, 0,15% from each of the operations.
A disadvantage, or an advantage?
For Google it will be a problem. They were obliged, if they wanted to compete with Apple, to launch their mobile payments platform, but perhaps they expected to receive something from that platform. For users, however, it is perhaps more of an advantage than a disadvantage. It is not that we were going to pay more to use Android Pay, because in reality these types of commissions are assumed by the bank. Thus, without commissions to be charged, more banks could be willing to integrate the Google platform. Probably many were already going to do it, since if they have been willing to give 0,15% to Apple, why not do something similar with Google. But the truth is that this is going to be a blow to the world of mobile payments. As with Android, Google will attract more banks, since its service will not entail any cost per purchase. And in turn, this will force Apple to have to lower the commissions that remain so that the banks do not decide to forget those of Cupertino for the androids. However, the contracts that Apple signed were for three years, so at least for now, they have some margin. Be that as it may, the truth is that this, which could seem like a disadvantage for Google, will mean that there are fewer limitations so that the platform begins to be used all over the world. And perhaps that works in our favor at first, and in favor of Google if they succeed before Apple, despite having come later.
Source: Wall Street Journal