Israelis Can Now Start Using Google Pay. Here’s How It Works

Google is six months behind Apple in offering payment services – and banks and credit card companies will compete to get customers to make them the default payment option for the app

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The Google Pay app.
The Google Pay app.Credit: Jens Buttner/dpa/AFP
Jenya Volinsky

Google launched on Tuesday its payment app service, Google Pay, in Israel.

Most Israeli smartphone users – those with Google’s Android operating system with version 5.0 and up, who make up about 80 percent of all smartphones in Israel – can now make purchases in stores using Google Pay.

Where will I be able to use Google Pay?

When you're ready to pay at the store, simply unlock the phone and place it near the wireless sales terminal. It is not even necessary to open the Google Pay app.

How does the payment work?

Download the Pay app from Google’s Play Store, and add the details of your credit card, from one of the banks or credit card companies that support the app.

The list includes: Bank Hapoalim; Bank Leumi, including its Pepper subsidiary; Israel Discount Bank; Mizrahi Tefahot Bank; First International Bank; and Bank Yahav.

The three credit card companies are Isracard, Max and Visa Cal.

What happens if my phone is lost or stolen?

The real credit card number – and the details of any payment – are not stored on the phone and are not sent to stores, said Google in the statement announcing the launch of the app in Israel.

Purchases made with Google Pay use a virtual credit card number called a “token,” which is specific to each phone and is linked to a dynamic security code that changes for every purchase.

This is similar to the technology implemented in the Apple Pay digital wallet, and is based on technology from Mastercard.

So even if the phone is stolen, because the credit card data is not kept on the device it isn't necessary to cancel the credit card number entered into the app.

Google says that in such a case, you can use the “Find my phone” function from anywhere to lock the phone immediately, secure it with a new password – and just in case also erase the credit card details from your personal information.

Consumers will choose only one digital wallet

“One of Google’s built-in advantages is that they are an open wallet, and if today I keep a few credit cards in my wallet, for all the cards to be in a digital wallet I need to have a number of digital wallets."

"Most users won’t bother to download more than one wallet,” said Oz Azaria, the director of business development at Mastercard. 

A “wallet that is not open” means one from a local provider, such as for use only with the bank or credit card company’s own credit card.

This is why Azaria says he expects consumers to increase their use of digital wallets in general in Israel.

Google Pay is arriving after about 7 percent of payments in Israel are through digital wallets and a number of wallets already exist in Israel for Android phones in Israel.

The three major credit card companies and four of the large banks all operate digital wallets. But before Apple Pay was launched in Israel in May 2021, the public rarely used these apps for in store purchases.

Even though the excitement has calmed down a bit since the launch, most of the use of digital wallets in Israel today is by Apple Pay users, even though they make up only 20 percent of smartphone users.

The new contactless EMV sales points have grown within two years from 2 percent of sales to an expected 75 percent by the end of this year.

Will the banks and credit card firms will be able to compete with Google?

“We see places around the world where the banks are providing nice competition even for Google. If the wallet is not just a means of payment, but provides other value such as cooperation with retailers or brand loyalty programs, or if it’s an application you use every day in any case, then there is room for other strong players too,” says Azaria.

Google Pay may allow the storage and use of many credit cards, but only one of them can be chosen as the default – and many of the banks and credit card companies involved have already announced they are offering benefits for customers who use their cards in Google Pay.

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