6 ways the 'Pay' wallets are fighting harder

Since the debut of Apple Pay in 2014, seemingly every major tech company and retailer has wanted its own 'Pay' wallet. The first wave seemed to largely copy Apple's model to benefit from the tech giant's marketing push. But lately each of these wallets has developed its own personality — and, presumably, its own must-have feature to pull consumers and merchants away from the competition.

This item is compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald, David Heun and Michael Moeser. Click the links in each item to read more.

Apple pays the rent
iphone 7 user
A customer holds a newly purchased iPhone 7 smartphone at an Apple Inc. in San Francisco, California, U.S., on Friday, Sept. 16, 2016. Shoppers looking to buy Apple Inc.'s new iPhone 7 smartphones on Friday better have ordered ahead. Brisk demand left some stores sold out, leaving those who purchased online with the best chance to get their hands on the latest models -- and some resorting to extreme measures. Photographer: Michael Short/Bloomberg
By now, everyone knows how Apple Pay works at the point of sale, but the mobile wallet has a bit of brand-building to do for its growing P2P feature.

Apple recently started airing a commercial that shows a landlord using Apple Pay Cash and iMessage to pry rent out of a tenant is meant to elicit a chuckle, but it also shows how P2P providers must aggressively communicate the capabilities of their apps.

The challenge with a P2P system that's built seamlessly into phones and messaging apps is reminding consumers that it's there to begin with. The eviction ad is part of an evolution toward broad financial services that's probably necessary for the P2P and social group payments market to remain relevant — particularly as the novelty of texting people money for drinks wears off.

In the Apple ad, the landlord and tenant communicate with each other in a combination of Apple Pay and the Messages app, with a subtle message of funds owed and a collection message.
Google Pay plays to the search giant's strengths
Google signage
Google Inc. Chromebook laptop computers sit on display in front of a sign featuring the company's logo at the company's Asia-Pacific headquarters during its opening day in Singapore, on Thursday, Nov. 10, 2016. Google officially opened its new hub in Singapore today. Photographer: Ore Huiying/Bloomberg
Google's mobile wallet has gone through several iterations, but the most recent — Google Pay — signals a significant turning point for the company's mobile wallet strategy.

As always, Google's strength is search. This gives the company a unique edge as it expands its mobile wallet strategy to include multiple rival brands. This starts with PayPal, which Google Pay is including as a funding option, and is fueled by Google Pay's integration throughout the tech giant's ecosystem. By incorporating rival brands, Google can make its wallet app a de facto search tool for finding the right mobile wallet for any particular retailer, website or in-app purchase.

To further this plan, Google has shed its role as a gatekeeper. The original Google Wallet, which launched in 2011, failed to attract more than a single bank partner because of the stringent requirements Google had in place at the product's launch. It took a fundamental shift in technology to bring more issuers on board, but it also left Google with fractured ecosystem that it struggled to unify.

The next iteration, Android Pay, was a streamlined product designed to shed the complexity that Google Wallet built up over the years. Its branding echoed that of Apple, which is notoriously controlling of its ecosystem. Google Pay is less a response to Apple and more an embrace of open development and open banking.

With online payments providers Braintree and Stripe setting the stage for embedding one-click payments into e-commerce stream, it has become clear that Google needs to be a part of that market in all of the channels where Google's Chrome and Android ecosystems are active.
Samsung Pay makes new friends
Samsung Pay app
An employee demonstrates Samsung Electronics Co.'s Samsung Pay application on a Galaxy Note 7 smartphone with stylus during a media event in Seoul, South Korea, on Thursday, Aug. 11, 2016. Samsung's large-screen Galaxy Note 7 smartphone can be unlocked with an iris-scanning camera. Photographer: SeongJoon Cho/Bloomberg
Samsung Pay is adding Chase Pay as a funding option, combining the strengths of two very different approaches to mobile payments.

Samsung Pay's claim to fame is a technology that allows the NFC wallet to also emulate a magnetic stripe signal at terminals that don't accept NFC payments. Chase Pay's the polar opposite — the app uses a QR code reader, a low-tech alternative that makes it available on many more phones.

The agreement addresses the limitations of JPMorgan Chase's approach, which requires merchants to have a QR code reader at their counters. “Now our customers can use the Chase Pay app at millions of merchants around the country,” said Jennifer Roberts, head of Chase Pay.

While Chase cards have long been able to be used with the Samsung Pay wallet, what makes this partnership different is that Chase Pay is a mobile wallet in its own right. Starting Friday, Chase Pay customers with compatible Samsung Galaxy smartphones will have the option to link their Chase Pay accounts to Samsung Pay.

For Chase Pay customers who link their account to Samsung Pay and make purchases, there is an opportunity to double dip on rewards by earning points from both their Samsung and Chase accounts.

Samsung Pay is limited to Samsung phones, but consumers still have the option to load other mobile wallets to Samsung devices, including retailer-specific choices such as Walmart Pay. For Samsung Pay to remain a selling point for Samsung handsets, the smartphone maker has actively sought partners to expand its app's funding options. Most recently, Samsung added PayPal as a partner to the Samsung Pay wallet.
Chase Pay's e-commerce play
jpmorgan chase branch
JPMorgan Chase & Co. bank signage is displayed outside a branch in New York, U.S., on Monday, July 11, 2016. JPMorgan Chase & Co. is scheduled to release earnings figures on July 14. Photographer: Eric Thayer/Bloomberg
The competition and incentive for an issuer like JPMorgan Chase to have its payment option front-and-center on an e-retailer checkout page is increasing, due largely to Visa and Mastercard agreeing to a standard for a common e-commerce pay buttonand PayPal continuing to advance its one-click online payment technology.

Chase has secured a place on the BigCommerce platform, as retailers are able to accept Chase Pay on their online stores starting this summer.

In addition, Chase's WePay subsidiary will handle the merchant onboarding, adding to BigCommerce's more than 60,000 small and mid-size retailers it helps manage shipping and payments, as well as listing products on Amazon, eBay and Facebook marketplaces.

JPMorgan Chase acquired WePay last year for $200 million to bolster its merchant acquiring and digital payments expansions. WePay mostly provides tools that help small and mid-size merchants build e-commerce interfaces.
Walmart Pay gives instant credit
Walmart shopping basket
A customer carries a basket while shopping for school supplies at a Wal-Mart Stores Inc. location in Burbank, California, U.S., on Tuesday, Aug. 8, 2017. Wal-Mart Stores is scheduled to release earnings figures on August 17. Photographer: Patrick T. Fallon/Bloomberg
Credit card usage began expanding with the economy, and Walmart wants to ride that wave with several enhancements to its own credit cards, including near-instant access to newly issued credit accounts within its mobile payments app.

Customers approved for Walmart’s store-brand credit card or its Walmart Mastercard may now immediately use those accounts to pay via a virtual card within the Walmart Pay app.

Walmart Pay, launched just over a year ago, supports the new process for customers approved in stores or online. Synchrony Financial is Walmart’s credit card issuing partner.
Is Venmo the new 'Uber Pay'?
Uber app
The Uber Technologies Inc. application icon seen in an arranged photograph taken in Bangkok, Thailand, on Friday, March 9, 2018. Grab, the dominant ride-hailing service in Southeast Asia, is close to finalizing a deal to acquire Uber's business in the region and may sign a deal this week or next, according to people familiar with the matter. Photographer: Brent Lewin/Bloomberg
On the surface, the Uber-Venmo partnership sounds like a coup for Venmo, getting its brand into the app that defined the ride-sharing category. But the partnership is a much bigger deal for Uber, which is quietly competing against the payment option that new riders are most likely to select.

The Venmo news follows last year's addition of a Barclays credit card that Uber riders can apply for and manage within the Uber app. These two payment options serve very different markets — with Venmo a staple of millennials — but from Uber's perspective, they are both far better than allowing riders to use the mobile wallet that came built into their phone.

Both Uber and Lyft accept Apple Pay to expand consumer options, but it’s not their first choice because of a lack of data sharing. Apple Pay is also notorious for its fees, creating a scenario where Uber and its rivals are paying more for a payment option that gives them less of what they want.

“We don’t have a direct relationship at that point with that customer who’s signing on using Apple Pay. … All we know is a token, at that point," Ashwin Raj, Lyft’s vice president of payments, said at SourceMedia's PayThink conference in 2017. "That is less preferable.”

By contrast, Venmo is all about the data. The company, a unit of PayPal, can attribute its early success to an interface that mimics a social media feed, complete with emojis. More than 6 million Venmo payments included the word "Uber" in their description over the past year, Venmo said.

In those cases, Venmo users were splitting rides with one another and using the P2P app to repay their friends — Uber didn't see any savings from that usage. If those 6 million riders can start paying Uber directly from their Venmo accounts, they would create a meaningful reduction in credit card interchange expense. Uber declined to provide a breakdown of how its customers pay for their rides, but since many options are credit card based, it’s safe to say the cost could be steep.

The ride-sharing market is hotly competitive. Uber faces direct rivals like Lyft, which just bought the bike-sharing company Motivate; and Grab, which is aggressively diversifying its financial services offerings. All of these companies face pressure from legacy taxi companies and regulators.