OEM Pay vs. Issuer Pay

With the introduction of mobile payments, a brand new market has opened up to OEM pay. The OEMs revolution of in-app and App Store payments, of which the next logical stepping stone has been contactless payments. This has resulted in OEM Pays, which is the Mobile Payment Applications (MPA) of the mobile device producers, which allows users to add cards from multiple banks to the wallet application.

There are many OEM Pay apps out there, and the most common are; Android Pay, Apple Pay, and Samsung Pay. OEM Pay enables issuers to be present in the pre-installed OEM Pay app, allowing their users to perform payments. The solutions are rapidly growing in popularity and expanding into new markets and countries.

Since the launch of the various OEM Pays over the last few years, they are perceived as giant actors in the mobile payments ecosystem, each serving about 25 million to 85 million users.

What about issuer pay?

Issuer Pay allows Issuers to provide their users with their own Mobile Payment Application (MPA), designed to reflect their specific look and feel and promote their branding throughout the application. The MPA can be combined with the issuer’s existing application(s) or provide a separate payment app only for mobile payments. Compared to the OEM Pays, this provides a more flexible user experience, design, and user interaction.

Key benefits

The two varying options bring different possibilities and opportunities for the issuers. OEM Pay can give the user a more seamless experience, as all cards are in one application. The Issuer Pay can bring more flexibility and possibilities to the user, especially in terms of value-added services and interaction with the users.

The below table highlights some of the key features and differences between OEM Pay and Issuer Pay.
Branding options are very good for Issuer Pay as the issuer controls the mobile application and the user experience.  In OEM Pay, the issuer has limited branding possibilities through card art and other available interfaces. The popularity and availability of iOS, Apple’s proprietary operating system, has been one of the major reasons why issuers have decided to enable OEM Pay and especially Apple Pay. On iOS, NFC is not available for third-party developers, allowing only Masterpass transactions to work on that platform.Red is not available, yellow is partially available,  green is available

With Issuer Pay, the issuers can maintain flexibility with a highly customizable solution. This allows for a simplified user experience and onboarding, the possibility to add other services to existing applications and the choice of which technology to use.

Combining the Pays

By combining Issuer Pay with one or multiple OEM Pay apps, the issuer will benefit by providing a broader and more flexible solution, allowing the consumer to choose what wallet to use. In addition, the issuer can enable their cards to be available in other third-party wallets, meaning every wallet with support for third-party cards can digitize them providing yet another channel to usage.

Connecting the Pays give issuers possibilities to expand their customer base, be present in multiple wallets and provide the best user experience for consumers. For users, the key benefits are the ability to select their preferred payment wallet with the knowledge that they can use their existing cards in any of the apps.

If you would like to learn more about OEM and Issuer Pay, comment below or get in touch with us.