Here’s What Google’s Doing to Counter Apple Pay

  • Philip Ryan
  • February 12, 2015
  • 1

canstockphoto24689236In order to compete with Apple Pay, it appears that Google is going back to an idea that didn’t work for Square: allowing consumers to pay while leaving their phone in their pocket.

According to The Information, the new system, currently being tested, is called Plaso (pronounced “Play-So”) and uses Bluetooth to authenticate a user’s phone as a security measure, but relies primarily on a customer speaking his initials to the cashier in order to identify himself. Square Wallet, which was pulled from app stores last May, had a similar user experience, letting them keep their phones in their pockets while customers would be verified by their name and face. This was all to avoid any tapping, typing, or swiping, but it didn’t work out. Plaso’s relationship with Google Wallet is unclear.

So what is Google thinking?

Payments expert Cherian Abraham commented dryly on Twitter, “Google seems to be suffering from ‘payments amnesia.'”

Square is also reeling from Apple Pay’s success, and updating its software to work on Android devices, after relying solely on iPads at its POS devices until now. This action is meant to lessen Square’s reliance on Apple as the two companies move closer to competing at the point of sale. Square is also currently working on accepting Apple Pay at its registers.

A year ago Google Wallet and Square Wallet were buzzy products, but today, one is gone and the other barely part of the conversation because of Apple, which manages to make money on Apple Pay transactions, while Google has long been said to lose money on every Google Wallet transaction.

Yesterday, Apple Pay was also added to the iOS app for Starbucks, the uncrowned king of mobile payments. Everything, it seems, is falling Apple’s way.

Tim Cook recently took to the stage at Goldman Sachs to discuss the Apple Watch and the faster-than-expected growth of Apple Pay usage.

“We see it happening faster and faster,” he said, describing user adoption. “This was only possible because we could control and design the hardware, the software and the service. You can imagine trying to do this with several different companies. You would be pulling your hair out.”

Plaso seems to be a sign of just that.

Learn more about alternative payments at Bank Innovation 2015, March 2-3 in Seattle. Click here to get invited.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism. He can be reached at pryan@royalmedia.com.

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