Google Inc. (NASDAQ:GOOGL)’s Wallet, Android Pay Or Apple Inc, (NASDAQ:AAPL)’s Apple Pay? No, Cash Is Still The King


A new report on mobile payments seems to show that Google Inc. (NASDAQ:GOOG)(NASDAQ:GOOGL) and Apple Inc, (NASDAQ:AAPL) have much work to do to get acceptance among small merchants. Google already has Google Wallet (and soon Android Pay) as its mobile payment service but the company is also working on an improved version of the service to speed up transactions. Apple’s Apple Pay already has the backing of more than 700,000 stores. However, neither Google Wallet nor Apple Pay is popular among consumers and small merchants.

Google Inc. (NASDAQ:GOOGL) and Apple are both trying to get people to pay for purchases through their smartphones. They have been able to get major banks and card issuers to back their services, but what is happening is that the progress of the adoption of both Google Wallet and Apple Pay among small merchants has been slow at best.

One of the reasons for the slow uptake of the mobile payment services is that most people still find it convenient to pay with their cards and another reason is that many retailers have not upgraded to support the technology necessary for the NFC needed for both systems.

Small merchants prefer cash

The other main reason for the slow adoption of Google Inc. (NASDAQ:GOOGL)’s Wallet and Apple’s Apple Pay is that small merchants are better off accepting cash than going through the trouble of implementing mobile payment systems.

The report on mobile payment shows that 87% of small businesses don’t support mobile payment and there is a nice reason for that. The cost of implementing the system is out of reach for these businesses. For example, they have to update their POS to accept Apple Pay, train their staff to deals with the new processes among others.

The trouble of realigning systems for the new payment systems means that small merchants think they are better of accepting cash. That is particularly true in the case of low-margin retailers and stores that are already struggle with credit card headaches.

Driving value proposition

Google Inc. (NASDAQ:GOOGL) and Apple can ignite interest in their respective mobile payment services by figuring out how to help small merchants deal with additional costs that they encounter to implement the new payment services. Reimbursements, incentives and discounts to impress merchants may do.

Things likely to change

Retailers have a set an October 2015 deadline for most US merchants to update their payment systems. The new systems will be easier to enable with payment systems such as Android Pay or Apple Pay. A key reason for the delay is the upgrade’s high cost—$500 to $1,000 per payment terminal, according to researcher Javelin Strategy & Research, a division of Greenwich Associate. Credit card companies have said most retailers and banks will be liable for some fraudulent in-store transactions if they don’t have the new system.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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