Google will not be earning any transaction fees from its new mobile payments service, an action which may force Apple to lower or put a stop to its credit card transaction agreements.
The Wall Street Journal broke the news on Friday, as Google are set to emulate Visa and MasterCard’s ‘tokenisation’ service, which prevents payments services from charging fees to issuers. This means that Android Pay will not be taking a cut from the transactions processed within its app.
‘‘There is one agreement with Visa and the banks can have confidence that there are no pass-through fees,’’ said Ryan McInerney, vice president of Visa, in an interview with the Journal.
This move by Google could put pressure on Apple and its mobile payment service, Apple Pay.
The California-based firm sealed agreements with banks and credit card issuers last year, in which they now receive 0.15 per cent of the value of each credit card transaction, according to the Journal’s report. Apple Pay also acquires a half-cent per purchase on bank debit cards.
This news could spark outrage from banks across the United States. The newspaper revealed that some banks are unhappy with sharing fees with Apple and could use this news to push through a new sharing agreement.
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