The Tech Battle Between PayPal, Apple Pay, and Google Pay
Clay Banks

Google Pay, Apple Pay, and PayPal are three financial solutions that have changed the way consumers access their money and complete transactions. They have proven that the move towards a cashless society is becoming tangible, recently fuelled by the pandemic, which led many businesses to accept card payments only. Still, there are only 43.9 million people who use Apple Pay and 25 million using Google Pay – compared to 329 million that use PayPal. Below, we’ll explore the tech battle that’s gripping these three tech giants and how traditional banking holds up.

The Reliance On Traditional Banking

Considering there are 8 billion people worldwide, a relatively low percentage utilize Apple Pay and Google pay despite claiming to be leaders in payment processing innovation. Traditional banking payment processes like eCheck or ACH payments still reign supreme, especially in the world of business-to-business with substantial transactions.

Why? Because there’s trust, security, and understanding in how these traditional payment processing methods work. Fintech solutions like Apple and Google Pay are plagued with tech-related issues such as cards disconnecting with bank accounts, biometrics failing, and issues with card readers that see people pulling on their bank cards to pay.

Still, that doesn’t mean the race to be the best isn’t on – tech giants like Apple and Google realize that their payment processing innovations are a real-time POS payment solution that works. And so, they power on with their quest to be the best.

Why Are So Many People Yet To Use Google and Apple Pay?

There’s no denying that Google and Apple Pay are innovative, yet so many people are yet to use the technology. One study found that the number of people using Apple Pay equates to only 6% of people that own an iPhone. That’s because there is still a dominance of plastic cards distributed by central banks that people prefer to use. Plus, since the launch of Apple Pay, banks have begun distributing contactless debit and credit cards which offer the same service as Apple Pay – tap and pay.

The same goes for Google Pay – there’s a reluctance to use the service because consumers can do the same thing with their contactless debit or credit card. Plus, some consumers worry about the safety issues associated with adding a bank card to a mobile phone. Much like with a bank card, a phone in the wrong hands can make a payment in one swipe. With Google Pay, users don’t even have to use their fingerprint to confirm the contactless payment; they only need to hold the device near the terminal.

Still, trust has improved over the years, but plastic bank cards still seem to reign supreme.

The Antitrust Battle

Apple and Google have landed themselves in hot water, with many governments and financial institutions worldwide investigating antitrust allegations. Apple, in particular, finds itself at the heart of the allegations that accuse Apple of having too much control over the market. The European Commission, for example, has launched an inquiry into whether Apple Pay’s terms and conditions violate the EU’s competition rules.

The allegations include; Apple limiting access to Apple Pay, the measures for integrating Apple Pay in merchant apps and websites on iPhones and iPads, and limiting access to Near Field Communication functionality.

Google also finds itself in a similar battle alongside Apple as app developers accuse the tech giants of being anti-competitive. For developers to distribute apps across the Google and Apple app stores, they have to sacrifice 30% of profits through the store, and they also force developers to use their payment services, which also takes a cut. The two tech giants have been a little too greedy with their complete stronghold over the entire internet, not just their app stores.

How does this impact the Apple and Google Pay that most people use on their phones? It proves that Apple and Google have long been about making money. They profit from the payment systems that focus on limiting competition and maximizing returns.

PayPal Is Miles Ahead

Where does PayPal stand amongst all the drama? Well, it’s in the clear. PayPal is miles ahead, but it’s also slightly different from Apple and Google pay. Consumers can use PayPal to pay for products online through stores and marketplaces like eBay, Nike, and Adidas. Consumers connect PayPal to their bank accounts and have access to a digital wallet – providing two innovative ways of making payments without having to type in and store card details at the checkout.

It provides security to users, there’s trust as it’s connected to traditional banking payment processes, and there’s the added option of PayPal credit. PayPal is geared towards online payments, which Apple and Google Pay are also creeping near. Some websites facilitate Google and Apple pay for smartphone users who use their biometrics to confirm the transaction, but it’s nowhere near as popular as PayPal.

Google Pay, Apple Pay, and PayPal are all fintech innovations that have proven the need for new innovative services that make on-the-go payments easier. But they don’t defeat the traditional roots of heavily relied on central banking services and applications, like the humble plastic debit card.