Can anyone ELI5 how Apple & Google Pay work in detail? I used to think they simply pass on my CC details to the merchant or the merchant's chosen payment gateway in one way or another (obfuscated or not), and the OP suggests the same. Moreover, I noticed that some merchants refuse my payment when I use e.g. Google Pay with my Amex instead of my MasterCard.
However, I'm sometimes under the impression that Apple/Google take on the role of a payment gateway or a payment method themselves. After all, they collect all my transaction data, and it also seems payment terminals at the grocery store needed special support for the Apple/Google Pay apps. Interestingly, this comment[0] is saying the opposite, namely that at least Apple Pay is very much rooted in standards.
But what is Apple and Google's special proprietary sauce then? Why are these apps so hard/impossible to replace by open-source alternatives? Is it because only Apple/Google get full access to the NFC chips on iOS/Android?
However, I'm sometimes under the impression that Apple/Google take on the role of a payment gateway or a payment method themselves. After all, they collect all my transaction data, and it also seems payment terminals at the grocery store needed special support for the Apple/Google Pay apps. Interestingly, this comment[0] is saying the opposite, namely that at least Apple Pay is very much rooted in standards.
But what is Apple and Google's special proprietary sauce then? Why are these apps so hard/impossible to replace by open-source alternatives? Is it because only Apple/Google get full access to the NFC chips on iOS/Android?
[0]: https://news.ycombinator.com/item?id=39845805