A number of surveys have highlighted that a large percentage of modern people access websites and initiate web search on their smartphones, tablets and phablets. Likewise, many users also indulge in mobile commerce transactions, and avail the in-app purchase option included in mobile apps. The digital wallets make it easier for users to make payment for the products or services purchased using their mobile devices. Also, a user can use his digital wallet to make payment securely without using his debit or credit cards.
The users also have option to choose from two distinct types of digital wallets – the device-based, and internet-based digital wallets. The device-based digital wallets enable users to make payment simply by waving their mobile device near a contactless reader. The near field communication (NFC) technology embedded into the mobile device communicates with the contactless reader seamlessly, and enables users to make payment without using their cards or online banking account.
At the same time, the users also have option to use internet-based digital wallets. The internet-based digital wallets allow each user to add hits debit/credit card information to an account/profile, and make payment by signing in to the account or profile. These wallets make it easier for users to make payment for products or services purchased online without using their debit/credit cards. Each user also has option to choose from a number of popular digital wallets including Apple Pay, Google Wallet and PayPal.
Brief Overview of Apple Pay, Google Wallet, and PayPal
Apple is a proprietary and device-based digital wallet. It can be used by only people using specific models of iPhone, iPad and Apple Pay. Like other device-based digital wallets, Apple Pay communicated with the contactless reader through near field communication technologies (NFC). Hence, the users can make payment easily simply by waving his iPhone or iPad near the contactless reader. However, he can only use Apple Pay at stores with contactless terminals. At present, many large retailers and stores support Apple Pay. Also, Apple is planning to roll out its proprietary digital wallet service gradually in various countries.
Google Wallet was initially launched as an internet-based digital wallet. Google recently redesigned the digital wallet application to enable users to send money to anyone in USA simply with an email address and a phone number. The Google Wallet app can transfer money from the user’s bank account, debit card or Wallet balance. Each user can use Google Wallet to send and request money on both iOS and Android devices. Also, he can use the application on desktop computers to send and request money through his Gmail account. The user also has option to use Google Wallet card additionally for ATM money withdrawals and in-store purchases.
PayPal is one of the widely used internet-based digital wallets. A user can use his online PayPal account to send and receive payment on many devices. At the same time, the users also have option to download and use PayPal apps on their mobile devices. The PayPal app is currently available for major mobile operating systems including iOS and Android. However, each user has to sign-in to his PayPal account to make payment or transfer money to a linked bank account. Many stores nowadays use point-of-sale equipments that allow customers to make payment through their PayPal accounts directly.
Major Points of Distinction between Apple Pay, Google Wallet and PayPal
Type of Digital Wallet: As noted earlier, Apple Pay is a device-based digital wallet. It uses near field communication (NFC) to enable people to make payment through their iPhone, iPad or Apple Watch. On the other hand, both Google Wallet and PayPal are internet-based digital wallets. These applications enable users to make payment on any device connected to the internet, without relying on any specific technology.
Compatibility: Apple Pay is also a proprietary digital wallet. It is currently compatible with specific Apple devices including iPhone 6, iPhone 6 plus and Apple Watch. Both Google Wallet and PayPal are independent of devices and platforms. The users can use the application to send and receive payment through web browsers on their desktop computers. Also, they have option to use the mobile version of these digital wallets on both iOS and Android devices.
Usage: At present, both Apple Pay and Google Wallet support tap-to-pay feature. The feature works based on the NFC technology, and enables users to make payment directly with their mobile devices. But the users can use Google Wallet at various outlets, while Apple Pay can be used only at stores with supported terminals. At the same time, the users have to sign-in to their PayPal account to make and receive payments more securely.
Acceptability: At present, users can use Apple Pay and Google Wallet only in US. The statistics posted on various websites indicate the Google Wallet is accepted at more stores and retail outlets in comparison to Apple Pay. However, PayPal is currently used by users living in various countries. It is currently more popular and widely used than other digital wallet applications. PayPal is also accepted by most online ecommerce websites and many independent retail stores.
Cost: A user can use both Apple Pay and Google Wallet without paying any fees or charges. Hence, both these digital wallets do not increase the cost of online and mobile transactions. But PayPal allow users to buy products online or in stores for free. But it requires sellers to pay certain fees according to the monetary value of the transaction. Also, it requires users to pay fees while transferring funds to users living in other countries.
However, the users also need to understand the features of mobile wallets. Apple Pay is a device-based digital wallet, while both Google Wallet and PayPal are internet-based digital wallets. Hence, a user can use Apple Pay only on his iPhone or iPad. On the other hand, PayPal and Google Wallet enable users to make payment without using any mobile device and app. Hence, it is always important for the users to pick the digital wallet according to his specific needs and habits.