Google Inc. is deepening the link between consumers’ Android Pay and PayPal accounts.
A consumer can use either payment method where the other is accepted. For example, a consumer can use her PayPal account to check out in apps and at physical stores that accept Android Pay, which the companies announced last month. Now consumers can use their Android Pay account to check out from retailers that offer PayPal on mobile websites in the Chrome browser.
“Google’s strategic move to join up Android Pay with PayPal will help create a frictionless experience for shoppers who want to use either payment service,” says Chris Mason, co-founder and CEO of mobile platform provider Branding Brand.
The partnership benefits both payment services, as PayPal has struggled to get a toehold on the physical point-of-sale system, says Thad Peterson, a senior analyst with market research and consulting firm Aite Group LLC.
The move also will help bolster Android Pay use, as many online retailers offer PayPal (235 in the Internet Retailer 2017 Top 500) and many consumers use PayPal, especially on mobile devices. PayPal Holdings Inc. processed about $32 billion worth of transactions initiated by smartphones and tablets in the first quarter of 2017 ended March 31, a 51.0% year-over-year increase, the company reported. The payments processor said nearly a third of its payment volume came from mobile devices.
“Tapping into PayPal’s broad network of merchants will give Android Pay a leg up to compete against Apple Pay, which is growing in both users and retailers,” Mason says. According to research firm Juniper Research, 86 million consumers use Apple Pay, compared with 24 million who use Android Pay.
Based on Branding Brand’s client data, Apple Pay orders comprised 26% of overall shopping app purchases in March. Plus, via mobile web checkouts, Apple Pay users spend 17% more than consumers who check out with PayPal, according to Branding Brand client data of 2.5 million site visits.
Beyond Apple Pay, iPhone shoppers’ revenue per visit was 42% more on average than Android shoppers, according to Branding Brand client data in Q1 2017. Given the large spending of iOS users, retailers should consider catering to them with Apple Pay, Mason says. “Apple users are extremely valuable,” he says.
51 retailers in the Internet Retailer 2017 Top 1000 offer Apple Pay to shoppers and 37 offer Android Pay, according to Top500Guide.com. PayPal is the most dominant quick checkout option with 459 merchants in the Top 1000 offering the payment service.
Branding Brand conducted a survey of 1,000 Apple Pay users in April and found that 25% of them say they often use it to buy products and 39% say they sometimes do.
However, consumers on average rank using their credit or debit card as their No.1 payment preference in app. In fact, Apple Pay and Pay Pal tied for No. 2. A retailer’s payment system ranked No. 3 and Amazon Pay ranked last.
The survey also finds that the most common way to use Apple Pay is within apps: 60% of respondents say they use the payment system in apps, 45% say they use it in store and 38% say on websites. Consumers could pick more than one response.