Google (GOOG) Won't Collect Transaction Fees from Card Issuers for Android Pay (AAPL)

Google (Nasdaq: GOOG)(Nasdaq: GOOGL) is going to earn transaction fees from credit-card issuers for its upcoming Android Pay mobile payments service, while Apple (Nasdaq: AAPL) is still expected to collect fees moving forward.

The WSJ noted late last Friday that Apple is receiving the fees following the launch of Apple Pay and the rapid more for financial institutions to work with the platform to keep up with competitors. As a result, Apple takes about 0.15 percent of the value of each credit-card transaction. The company collects half-a-cent on debit card purchases.

Google, however, will have to deal with the tokenization card security service, which prevents payments services from charging fees to users. This is done by swapping a cardholders account number with a unique set of numbers, thereby bypassing merchants from getting the actual card data.

Banks and institutions will probably move to try and eliminate Apple from collecting fees. An upcoming event which could trigger contract re-negotiations is Apple's move to take Apple Pay outside the U.S. In addition, many of Apple's contracts are for three years, but there are still two years left until expiration.

The issue may cause Google's Android Pay to have a slight advantage when it comes to expandion adaptation.

Shares of Apple are down modestly Monday.

You May Also Be Interested In

• Google (GOOGL) Makes Structural Changes to AI Teams to Quicken Progress: CEO
• Buy this beauty and cosmetics stock ahead of earnings report - Deutsche Bank
• Google consolidates its DeepMind and Research teams amid AI push