Perhaps in an attempt to increase adoption and better compete with Apple Pay, the Wall Street Journal is reporting that Google won’t be taking any cuts from transactions made through Android Pay, which is expected to launch later this year. Considering how Apple takes a 0.15% cut of every Apple Pay transaction, this could give Google’s upcoming mobile payments service a significant edge.
Google Inc. won’t earn any transaction fees from credit-card issuers for its coming mobile-phone payments service, unlike Apple Inc., because of evolving ground rules for the services. Credit-card issuers hope the changes pressure Apple to trim or eliminate its fees, say industry executives, highlighting the speed at which the economics are changing in the evolving mobile-payments business. Google disclosed its payments service, Android Pay, in late May, with wireless providers, payment networks, retailers and banks, stepping up competition with Apple Pay, which launched late last year. Hundreds of financial institutions scrambled to work with Apple Pay, afraid of being left at a competitive disadvantage. As a result, big banks and other card issuers agreed to give Apple 0.15% of the value of each credit-card transaction. For bank debit cards, Apple collects a half-cent per purchase, according to people familiar with the service.
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