Google's Android Pay not to get fees from MasterCard, Visa

MasterCard and Visa are set to stop Google's Android Pay from taking a cut of transactions.

The two payment gateways recently decided to make free the tokenisation card-security service that was embedded in iPhones, iPads and Android-run devices.

Commentators say the move would be welcomed by banks and could also have the effect of pressuring Apple to give up its own fee. Though Google would not be affected much, but given that it had been used to having its own way, it might have finally met its match in finance.

At the very least, Google would have expected its mobile payments app to be treated on par with Apple Pay when it launched last fall. That would not happen, though, as

The move would not affect Apple and it continued charging as much as 0.15 per cent of the value of each transaction paid for using Apple Pay.

The company was also expanding the service, adding more locations in the US and launching in the UK next month. In the event of Android Pay becoming as popular, or more so, the pressure was likely build on Apple - mostly from the card-issuing banks that had to give it a share of the spoils.

When Apple launched its own mobile payments system, issuers were lining up to link their product with the hugely successful and innovative brand. Apple had the power to set its own rules due to this.

However, according to a report from Pymnts.com, Android Pay was in a totally different situation, and while it stood no chance to collect revenue from the interchange fees of each transaction, the ''no fee'' provision of Android Pay might in the longer run work to its advantage. 

However, some to not buy that logic, given competing payments were platform-based, and a user was not likely to make the decision of iPhone versus Android phone based on the mobile wallet function.