Check out the latest from the FinTech podcast.
Scott: Three big giants are vying for your wallet and it's an intense battle to be sure. John Dunne, Vice President of Products for IR joins us today to talk about PayPal, Apple Pay, and Google Wallet. John, let's start with what differentiates the three.
John: Well, when people think about PayPal, they were the first people in this market and PayPal was a great way that I could give my credit card details, my bank information to a party that I trust and then I could go to a website that I had never been to before and I could make a transaction with them and I could feel safe knowing that I'm not actually giving them my credit card details to go sell in another land and I'm trusting PayPal and PayPal will be the middleman for me. And so that's where they've come from as their strength and they've gone from consumer to business to consumer to consumer payments and they've really played that role of that trusted middleman to transfer money between people that have only just met.
Now, Google Wallet on the other hand, came out a few years back and their goal was to stick your credit card in your phone and anywhere that had an NFC point of sale terminal, you're able to use your Google Wallet to make a payment. Now as it turns out, there was no massive value add with that. Now yes, you could use your Google Wallet online for transactions as well, but there was no massive differentiator in that service. It was just instead of carrying your card with you where you go.
Then enters Apple Pay and the last people to market and there's some really interesting numbers that we'll get into shortly, but what Apple Pay tried to do was to bring along the whole ecosystem along for the ride. Rather than just digitizing my credit card, they have tried to make it more secure with the tokenization and I know there are different card registration process challenges that different banks have and that's probably why we need to go back to the previous point of why do I need a card in the first place. But the Apple Pay experience that has the whole ecosystem brought into it of the card issuer and the tokenization of the transactions and actually participating in that payment taking place is a very powerful play.
Scott: So as we look at these big three, I think it would be safe to say and maybe you would correct me, but if we had to rank them in terms of, you know, successful, how widespread, that sort of thing, obviously PayPal as you described has been around a long time. Very widespread, people are very familiar with it. Apple Pay is growing very very quickly. People have quickly become familiar with it just from the short time it's been around. And then seems a distant third would be Google and Google Wallet. First off, do you agree with that assessment, and two, what does Google need to do to catch up?
John: Well, I'm going to quote here some research. The research was done by 451 Research. And, they looked at the, was published by Changewave Mobile Payments Trends in March this year. And what they state is they surveyed users of Apple Pay, PayPal and Google on the typical five point scale to where are you between very dissatisfied and very satisfied. 66% of Apple Pay users said they were very satisfied. 45% of PayPal users said they were very satisfied and 33% of Google Wallet users said they were very satisfied. And so I think there's a big feedback loop there from the individual users who, you know, they've already signed up for Apple Pay. They've already signed up for Google Wallet. They're using your service, but what do they think of your service? And when you have two-thirds of your users saying this is great, you've done a good job versus one-third of your users saying I'm very satisfied with this, I think that's your customers telling you whether you've hit the mark or not.
Scott: So what does the future hold for the big three?
John: Well, Apple Pay are going to go from strength to strength. They are rolled out now across 200 banks in the United States alone. The latest figures of the iPhone sales showed that last quarter they sold 74 and a half million iPhones. Now to put that in perspective, the previous biggest quarter was a year ago where they sold 51 million. So they got nearly a 50% uptick in the number of people purchasing iPhones which are all Apple Pay enabled. Google Wallet, you know, they really need to find a way to be relevant in the ecosystem. At the moment, they're just an alternate way of paying and they exist in the virtual space of purchasing on the web as well as in my phone. And, you know, there's really no motivation for me. It's just an alternate form of payment instead of carrying a card around. There's no added benefit. I don't feel more secure or any convenience like that. So I think they need to have a good look at what are they going to offer to both the merchants and to the consumers to drive that satisfaction. And you know, it's all about fraud prevention, it's all about convenience and making sure that, you know, everyone wants to know that their money is safe at night. And I hate to say it, but Google collect a lot of data on everyone, and if they're collecting data on what you're spending as well, you know, maybe people are not happy with that.
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