Google unveils Android Pay

Google unveils Android Pay

Having seen its Wallet service fail to take off, Google is aiming another shot at the fast-growing mobile payments market with the launch of Android Pay.

Unveiled at the Web giant's I/O developer conference, Android Pay enables in-app and NFC-based payments with handsets running the KitKat version of the OS at around 700,000 US locations. And for some firms, loyalty programmes and special offers will be automatically applied at checkouts.

With the newest version of Android, M, offering standardised support for fingerprint authentication, users will be able to unlock their phones with the push of a digit and tap a contactless reader for real-world transactions. In addition, open APIs mean that developers can build fingerprint authentication into their apps and enable customers to make purchases with a finger.

With Visa, MasterCard, American Express and Discover all onboard, customers add a card and a virtual account is created which is used to process payments, meaning retailers do not get access to card information. Users can activate Android Pay through Google's app or through any supporting bank app.

USAA and US Bank are among the first clutch of banks to declare their support for Android Pay and the app's fingerprint authentication feature.

“We’re committed to delivering simple and secure payment experiences for our members, which is why we are moving so quickly to integrate our cards with Android Pay,” says Vikram Parekh, assistant vice president of credit card development at USAA.

Meanwhile, with Wallet having suffered thanks to a lack of support from mobile network operators, Google is taking advantage of its recent acquisition of telco-owned rival Softcard to make sure that any Android handset bought through AT&T, T-Mobile or Verizon supports Android Pay out of the box.

Dave Burke, VP, engineering, Google, says: "We believe that the same partnership model which fuelled Android's growth from a single device seven years ago to now more than a billion users will enable Android Pay to be successful too.

"And we're working closely with payment networks, banks and developers to bring mobile payments to Android users around the world, with a roll out starting in parallel to launching M this year."

After its false start, Google is hoping that Android Pay will help it in the mobile payments battle with rival Apple, which launched its similar service last year and has seen strong adoption.

However, one potential problem for Google is handset giant Samsung, which will soon muddy the Android waters with its own wallet based on technology picked up through the recent acquisition of LoopPay.

Separately, Google has also confirmed that it will introduce click-to-buy buttons in video ads on YouTube, and across the company's search engine, in a move that is seen as a direct shot against Amazon's one-click online retail business.

Comments: (7)

A Finextra member
A Finextra member 28 May, 2015, 19:38Be the first to give this comment the thumbs up 0 likes

How many issuers ARE willing to amend their back-end again to ensure their customers can link existing cards to Android Pay?.. Apple managed to convince banks that "it's either our way or highway", but I don't think that mightly Google has the same panache... With no cards (tokenized or not) to use, Android Pay would follow Google Wallet.

Also, as for "Android Pay" - how lame is that as the name?! Come on, Larry!

A Finextra member
A Finextra member 28 May, 2015, 20:32Be the first to give this comment the thumbs up 0 likes

So, does this mean Google is giving up on HCE? Now that issuers have Android Pay, they probably can reduce the fees to Apple for card provisioning, actually not bad. Tokenization is not necessary the most efficient way against CNP. Up-hill battle is given, but Android Pay may turn out to be the saver for both Google Checkout and Google wallet, never know... Now it's turn for Paypal and Alipay, let's wait and see....

Halim Memis
Halim Memis - İSBANK - istanbul 29 May, 2015, 07:43Be the first to give this comment the thumbs up 0 likes

Is there any news on google will let issuers to develope their own payment apps. It is really important if google will let issuers to develop their own payment applications as of today. If it will not let them the situation will take us back to the days when GSM operators forced issuers play with their rules. The key thing is cooperation.

A Finextra member
A Finextra member 29 May, 2015, 15:36Be the first to give this comment the thumbs up 0 likes


Android Pay uses HCE - Android Pay won't work in dead zones. With Apple Pay, tokens are generated in a chip called the Secure Element. With Android Pay, they're generated in the cloud, which is what Host Card Emulation is.Your phone needs an Internet connection to access the cloud and therefore, Android Pay.


A Finextra member
A Finextra member 29 May, 2015, 18:251 like 1 like

It is interesting to take a look at the state of play in the mobile payments market, in the light of Google's latest move. I share my thoughts on this The Mobile Payments Game - State of Play post Android Pay. Do let me know if you agree with my thoughts on future outlook and the questions this raises.

A Finextra member
A Finextra member 29 May, 2015, 19:28Be the first to give this comment the thumbs up 0 likes

It would be very intersting to see how the service flow would look like as rumors says it would work at API layer and biometric would be part and integrated through new version of andoid , android-m

A Finextra member
A Finextra member 29 May, 2015, 19:51Be the first to give this comment the thumbs up 0 likes

If Android Pay doesn't work in dead zones, that is doing away with the convenience of Google Wallet, IMHO, Google is taking a dangerous risk of deployment. I wonder why? Google is capable of doing better.