Android Pay vs. Apple Pay

Google Inc. (NASDAQ: GOOG) has finally unveiled its answer to Apple Pay—Android Pay. Basically, Android Pay looks like a clone of Apple Pay; it’s an app that lets you take money directly from your bank account or credit card balance and use it to pay in stores or apps.

Not surprisingly, Android Pay seems to have many of the same strengths and weaknesses as Apple Pay. Like Apple Pay, it allows for seamless payment, but also like Apple Pay, it is at the mercy of retailers. The list of retailers that actually accepts Android Pay, like the list of stores that accepts Apple Pay, is very limited.

Another problem is that Android Pay can only be used in one country, the United States. Currently, Apple Pay can only be used in the United States and the United Kingdom, although Apple Inc. (NASDAQ: AAPL) is working hard to get it accepted in the People’s Republic of China. There is still no word on when either solution will be available elsewhere in the world, such as Japan, Canada, or the European continent.

Payment Options on Android Pay

Android Pay does have one big advantage over Apple Pay; it can be integrated with the Discover Card right now. Apple claims that it will accept Discover, but it has not said when that will happen. Note: shortly after I wrote this article Apple Pay started accepting the Discover Card, because of the competition.

Currently, Android Pay users have the following payment options:

• Visa (NYSE: VA)
• MasterCard (NYSE: MA)
• Discover Financial – the Discover Card (NYSE: DFS)
• American Express or Amex (NYSE: AXP)
• Bank of America (NYSE: BAC)
• Citi or Citigroup (NYSE: C)
• Navy Federal Credit Union
• PNC
• Regions Bank
• USAA, a federal credit union
• US Bank or US Bancorp (NYSE: USB)
• Wells Fargo (NYSE: WFC)

As you can see, the number of banks you can access through Android Pay is limited, although that will undoubtedly change. Capital One is listed as “coming soon.” Interestingly enough, banks and credit card companies seem to be more open to payment apps than retailers are probably because of the fees they want to make from these solutions.

One glaring omission that should be there is PayPal Holdings Inc. (NASDAQ: PYPL), which controls Venmo. Another is Square Inc. If Google (NASDAQ: GOOGL) could integrate Android Pay with them, it would make a lot more money. This would also give Android Pay a major advantage over Apple Pay, which does not have PayPal either.

Another glaring omission from the list of Android Pay options is JPMorgan Chase (NYSE: JPM), another of the big monster banks. My guess is that more financial institutions, including many local, regional and national banks and credit unions, will be added as the service expands. The number of banks that utilize Apple Pay has exploded since it appeared.

Who Actually Accepts Android Pay?

Now to answer the most important question: Which retailers actually accept Android Pay? As with Apple Pay, the list is very limited but growing, and many of the biggest names in American retail, including Walmart Stores Inc., Costco Wholesale, CVS Health, Kroger, Target, Home Depot and Safeway/Albertsons, are conspicuously absent.

The current list of businesses that accept Android Pay at their physical locations includes the following:

• Acme – Albertsons’ Philadelphia-area subsidiary
• Aeropostale
• American Eagle Outfitters
• AT&T – the phone and wireless company formerly known as Bell South
• Babies R Us
• Basha’s – a chain of supermarkets in Arizona and California
• BJ’s Wholesale Club
• Bloomingdales
• Champs’ sports bars
• Some Chevron gas stations
• Some Coca-Cola vending machines
• Davis Food & Drug – a chain of supermarkets in Utah
• The Disney Store
• Duane Reade drugstores
• Express – a chain of clothing stores
• FoodMaxx – a chain of warehouse supermarkets found in California
• Footaction USA
• Foot Locker
• Fuddruckers’ restaurants
• GameStop
• The Golden State Warriors NBA franchise
• House of Hoops by Footlocker
• Jamba Juice

• Jet Blue
• Jewel Osco pharmacies
• Kids Foot Locker
• Lady Foot Locker
• The Lego Store
• Lins’ Fresh Market – another Utah supermarket chain
• Lucky – a chain of supermarkets in California
• Macy’s
• McDonalds
• Meijer – a chain of superstores found in the Midwest
• Nike stores
• Office Depot
• The Orlando Magic, another NBA franchise
• Panera Bread
• Peet’s Coffee & Tea
• Pep Boys auto centers
• Some Pepsi vending machines
• Petco
• The Phoenix Suns NBA franchise
• Rubio’s Mexican Grill
• Save Mart Supermarkets
• Shaw’s – a chain of supermarkets in New England
• Star Market – a subsidiary of Shaw’s
• Six:02 – a chain of women’s fitness clothing stores
• Sports Authority
• Sprouts Farmers Market
• Staples
• Subway
• Some Texaco gas stations
• T-Mobile Wireless
• Toys R Us
• United Supermarkets – an Albertsons’ subsidiary in Texas and Oklahoma
• Unleashed by Petco
• USA Technologies
• Verizon
• VG’s Fresh Market – a chain of supermarkets in Michigan
• Walgreens
• Walt Disney World
• Wegmans’ supermarkets
• Whole Foods Market
• Winn Dixie supermarkets

Interestingly enough, there is not a coming soon section for stores on the Android Pay site as there is on Apple Pay. Nor is there any indication how many of these retailers’ locations actually accept Android Pay yet.

Another potential drawback is that is does not say whether drivers will be able to pay for gas at the pump or not. Persons that want to use Android Pay at gas stations may have to go inside.

A major selling point for Android Pay would be to add gas station credit cards to its system. Acceptance by the major gas stations could be critical for payment apps’ success as could acceptance by the major supermarket chains. Kroger (NYSE: KR), for example, is the nation’s largest grocer and its third largest operator of filling stations.

Another means of attracing new customers would be to find some way to integrate Android Pay with loyalty card programs like that offered by the various Kroger supermarkets. This program allows customers to save 1¢ a gallon on fuel for every $100 worth of groceries they buy. Other popular programs are offered at Safeway and Walgreens.

What Apps Can You Use Android Pay On?

The number of apps you can use Android Pay on is pretty limited. Interestingly enough, as with Apple Pay, some restaurants such as Chipotle Mexican Grill and Domino’s accept Android Pay at their apps but not in their physical locations. Here are the apps that accept Android Pay:

• Airbnb
• B&H
• Chipotle Mexican Grill
• Domino’s Pizza
• Dunkin Donuts
• Yelp’s Eat 24
• Etsy
• Eventbrite
• Expedia

• Groupon
• GrubHub
• Hotel Tonight
• Jack Threads
• Living Social
• Lyft
• Newegg
• OpenTable
• Priceline
• Seamless
• Spring
• Trip Advisor
• Uber
• Wish

Two glaring omissions here are Amazon.com and eBay. It is also not clear if app payment on Android Pay works yet or not because the app list has the words “This feature is coming soon” posted underneath it.

Finally, I do not see Google’s own Shopping Express or Google Play mentioned in the apps you can use Android Pay upon. One would think that Google would take advantage of that source of revenue.

It looks as if Android Pay is poised to give Apple Pay a good run for its money, but it seems to have many of the same limitations as its predecessor. It looks like getting Americans to accept and utilize payment apps is going to be a longer and harder process than many people think.

Disclosure: Your blogger and self-styled payments expert holds shares of PayPal, Bank of America and Kroger.