Google’s version of Apple Pay – ‘Android Pay’ will not carry any extra transaction fees from credit card companies, unlike rival Apple Pay who receives 0.15 percent value of each credit card transaction, reports the WSJ.

The report further stated that both Visa and MasterCard have made their ‘tokenisation’ card-security service free, which restricts payment services from charging fees to issuers. The two largest payment networks, Visa and MasterCard have issued new standards that essentially make mobile payment transactions free of charge.

“There is one agreement with Visa and the banks can have confidence that there are no pass-through fees,” Visa President Ryan McInerney told the WSJ.

These new standards will most likely put pressure on Apple to drop or lower its charges, as the company struck a deal last year with major banks and credit card issuers to get 0.15 percent value on every credit card transaction, while it gets half a cent on purchases made via debit cards.

For obvious reasons, merchants and bankers would be more in favor of the new system as there’s no hidden fees and charges involved, which is not such good news for Google as its Android Pay won’t be entitled to any cut made on a purchase. Though this would make the service more popular and result in widespread adoption as banks won’t have to worry about any hidden costs. While Google would have other means at their disposal to profit from this service, as it doesn’t rule out the possibility of charging for advertising and licensing.

Android Pay was unveiled at Google I/O 2015 developer’s conference last month, bringing together mobile carriers, banks and online retailers under one roof to allow Android users use their handsets instead of their cards to make their payments. Google’s David Burke said that Android Pay would work across more than 700,000 US retail outlets compatible with contactless payment services.

“We are at the start of an exciting journey, we are working closely with payment networks, banks and developers,” he added.

Meanwhile, the WSJ report also notes that these new rules may eventually lead to changes in Apple’s mobile phone payment deal with banks, as some banks are not so happy with sharing fees. Though for now, it seems Apple is on the safer side as contracts that entitle to receive cuts, ate still valid, at least for the next two years, claim sources.


  1. Apple pay has no chance against Samsung Pay which already works wih 99% of exising merchant terminals… No extra fees, no hassle.

    • EMV – the big fake out

      First, Visa has “mandated” that terminals be EMV compatible
      by October 2015. Why? Well, they say that a “Fraud” chargeback
      would revert to a higher entity, the processor.
      Remember the Durbin amendment?
      Yes, Amazon, Walmart and Target immediately had their “fine print”
      changed to give THEM the benefits. What
      about the MILLIONS of merchants on QMN (Bucket) rates? They continued to pay the same rate for debit
      as they always have.

      Immunity from Fraud? Ha-ha! Unless you are large enough to have the mojo
      to have your “fine print” modified, you will find that like every other
      chargeback EMV or not, your merchant agreement holds YOU responsible.

      The ONLY winners here are Walmart, Target and the large
      chains that can afford the legal teams to get their “fine print” changed will
      benefit. The average merchant will STILL
      bear the responsibility for ALL chargebacks, fraud or otherwise, EMV or Swipe.

      What this does do, is give processors and ISO’s a reason and
      rationale to re-sell new terminals to all of their clients. Believe me, that’ a LOT of terminals! Touting the non-existent benefits of EMV,
      they will sell, lease, and place EMV terminals wherever they can, getting a
      commission on each one.

      Don’t get sucked into this one.


Please enter your comment!
Please enter your name here