Innovation House got an understanding of how the innovative payment service Android Pay from Google works, and who will take advantage from its launch in Ukraine.
On November 1, Google announced the launch of Android Pay service in Ukraine. The service offers to make contactless payments in the internet and retail store chains. This is a tap-to-pay solution. Those, who have Android-based devices of KitKat 4.4 version or higher may take advantage of this solution. To do this, you shall first download the Android Pay app from Google Play store and add your bank card. Just unlock your device and hold it to the contactless terminal. There is no need to give your card, waste time to pull cash out of your pockets, enter security code in the application.
According to Google, Android Pay is supported in Ukraine by hundreds of companies, like Silpo, Fora, Ringoo, McDonald’s, OKKO and WOG filling stations, and even Kyiv’s underground subway.
Android Pay works with Mastercard and Visa cards as well.
Android Pay does not transfer bank card data to the seller. In case of loss or theft of your phone, you may block it or remotely delete all the data.
Ukraine became the 15th country in the world to have Google’s Android Pay. Privatbank became its first partner here. So far, this service may be used by its customers only. Oschadbank and FUIB are next in line. Google said that the list of partner banks will be constantly enlarged. Banks may connect to Android Pay on Click to Accept basis. In other words, simply via the internet, with no paper-warfare and propelling of Google office in Ukrainian into the process.
Attention to Ukraine
Android Pay launch in Ukraine was mainly initiated by Privatbank, which had lengthy negotiations with Google. By this time bank already had its own contactless payment tool called NFC wallet. Customers use it even now. However, the number of devices supporting contactless payment in our country is far from ideal. Only 496,000 out of 4,000,000 Android based smartphones, posessed by Privatbank customers, have NFC chips.
Entry to the Ukrainian market of such major player as Google may trigger all the market and may provide extra impetus for non-cash payments development. “We want to be part of the global payment community,” – this is how Oleg Serga, spokesperson of Privatbank, explained bank’s motives.
According to him, the most difficult thing in the negotiations with Google was to start them and to draw company’s attention to Ukraine. But when Google saw the situation at the market, the negotiations accelerated.
Is this necessary for Google?
Google makes no money of Android Pay service. According to Sholomko, company is just interested in non-cash settlements development. Primary income of internet giant is generated by advertising. Research company eMarketer shows that Google is likely to make $72.7 billion in advertising revenues by 2017 year-end. If we look at Android Pay against this background, it is about to be a good tool for e-shops conversion monitoring. In other words, Google in Ukraine will get better understanding when clicks on the advertising of its customers lead to real purchases.
Dmitry Sholomko, Google’s Country Manager in Ukraine, told Innovation House that company has some benchmarks (indicators) that are considered by it to determine whether one or another market is ready for Android Pay deployment. Such benchmarks include non-cash payments volume, penetration level of smartphones in the country (it has already reached 44% in Ukraine), number of terminals in retail store chains, etc. Privatbank’s network alone has 120,000 POS-terminals, 80,000 of which support cashless payments. Possibility of non-cash payments in underground subway and the popularity of this service in Ukraine have played a big role. According to Mastercard, in the last 2 years passengers in Ukraine made 14 million payments using the bank cards for travel by public transport. Mastercard Impact of Innovation Study showed that Ukraine is one of the most open to innovation markets. Average Ukrainian spends 4 hours a day on a smartphone. 72% of Ukrainians are ready to make payments from smartphones.