Apple Pay & Google Pay. How do they really work ?

^Introduction

Apple Pay and GooglePay are currently two of the most popular and well-known mobile payments on the Europe and U.S market. Trillions of dollars are transferred through them every year. Have you ever wondered how secure each method is and how it all really works ? The following article will briefly outline the payment providers, describe the technical details, and include a summary with statistics. Hope you fint it interesting.

^{General Info}

Apple Pay

• Introduced in 2014
• Available on devices with Touch / Face ID only.
• Does not reveal card data to merchants.

Google Pay

• Introduced in 2018
• Replaced Google Wallet (2011)
• Available on all devices – PIN
• Does not reveal card data to merchants.

^{Technical Details}

The image below shows the step-by-step flow of information from the moment the user enters the card data into their device, through payment and response from the payment providers.

1. Both Google and Apple users have to manually or by scanning enter the card data on their device.
   
2. Apple Pay: None of your card data are physically stored. Every apple device has a so-called Secure Element (SE). The chip communicates with the bank and passes your card info.
   
   Google Pay: After registration, Google will store your card info into their servers.
   
3. Apple Pay: Device Account Number (DAN) is generated. Interestingly, for the same card added on another device, a different number will be generated. From now on, every transaction is made through this number and not the physical card.
   
   Google Pay: After registration, Google will store your card info on their servers.
   
4. Once the user initiates a contactless payment, the entire process begins, which looks a little different in the last stage for each provider. Both Apple and Google devices passes DAN or Payment Token direct to the e-commerce servers
   
5. This is the point where you can see the biggest difference between the two payment systems.
   Apple Pay: The e-commerce server further sends, without asking for additional data, the same DAN number directly to the bank, which verifies its compliance and approves the payment.
   
   Google Pay: The e-commerce server communicates again with Google’s servers, which confirm its compliance, retrieve data about the type of transaction that was performed and further transmit the data to the bank, which approves the whole thing.
   
   

Summary: Each of these methods is safe in its own way. In any case, your card data are not transferred outside your device but replaced by the appropriate payment method. The only difference is that Google stores your payment data on its servers which helps them personalize ads and shopping suggestions as you browse the Internet. The pros and cons of both solutions are outlined below.

^Pros

Apple Pay

• Never tracks any transaction
• Transmits DAN direct to the bank
• Cannot monetize the users
• Apple device becomes an credit card.

Google Pay

• User can add any type of a credit or gift card
• Users can send and receive money onto their virtual card
• Google don’t need to make deals with the banks to provide payment transactions

^Cons

Apple Pay

• Need to negotiate deals with the banks
• Limited number of cards
• User cannot send and receive money between cards

Google Pay

• Tracks every transaction
• Delivers ads to the users based on transactions
• Charge vendors for every transaction

^{Usage Statistics in the U.S. – 2021}

As you can see in the image above, 45% of e-commerce payments are made via Apple and Google pay.
Apple has 500 million users, Google – 150 million.
92% of Transactions are made with Apple Pay, 5% with Google Pay.

As you can see, the number of mobile payments has increased fivefold since 2014. Personally, I believe that the number of new users will continue to increase at the same rate.

^Summary

There is no clear answer to the question of which method is better, safer, more convenient. Each supplier cares 100% about their customer and strives to provide them with the safest possible transaction and customer service.
With each passing year, contactless payments are gaining popularity and, consequently, the technology and infrastructure responsible for them are being developed. In truth, the choice usually depends on the device we use and these, as we know, have always had their supporters and opponents.