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Google Launches Android Pay to Compete with Apple Pay and Boost Mobile Payments

Op-ed - Google Launches Android Pay to Compete with Apple Pay and Boost Mobile Payments

In February, Bitcoin Magazine reported Google’s preliminary announcement of Android Pay. In June, we reported the official announcement of Android Pay at the annual Google I/O event on May 28 and 29, where Google revealed more information on its upcoming payment platform.

On Thursday, September 10, Google announced that it is beginning to roll outAndroid Pay.

“We’ll be rolling out gradually over the next few days, and this is just the beginning,” notes the announcement. “We will continue to add even more features, banks and store locations in the coming months, making it even easier to pay with your Android phone.”

Android Pay works with all NFC-enabled Android devices (running KitKat 4.4+), on any mobile carrier, at every tap and pay-ready location across the U.S. Android Pay will support credit and debit cards from the four major payment networks: American Express, Discover, MasterCard and Visa, issued by the most popular banks and credit unions.

Existing Google Wallet users will be able to access Android Pay through an update to the Wallet app. For new users, Android Pay will be available for download on Google Play in the next few days. Currently, seven out of 10 Android phones in the U.S. are equipped for Android Pay, and the app will come pre-installed on new NFC-enabled Android phones from AT&T, T-Mobile, and Verizon Wireless.

“Starting Thursday, shoppers will be able to use their phone to pay at more than one million retail stores in the U.S. that have point-of-sale registers equipped with near field communication technology, known as NFC,” Fortunereports. “Android Pay incorporates fingerprint biometrics to authenticate payments, whereby people verify their identity by pressing their finger onto their phone’s screens.”

Android Pay is, evidently, Google’s response to Apple Pay. The two systems are remarkably similar, but Android Pay seems more flexible – as is usually the case when comparing Apple’s walled garden to Android’s more open ecosystem. Android owns a much larger slice of the mobile devices market, especially in the developing world where mobile payments are growing faster. According to IDC, Android dominated the smartphone market with an 82.8 percent share in the second quarter of 2015, and it’s the only mobile OS whose share is growing, while iOS, Windows Phone and Blackberry are all declining. Android Pay could, therefore, boost mobile payments.

“Android Pay doesn’t store or transmit your credit card number,” notesThe Wall Street Journal. “Instead, like Apple Pay, it relies on an industry-standard approach called ‘tokenization.’ After you enter a card into Android Pay, the app generates a unique code called a token. Each card has its own token, and each token is specific to each Android. When you make a purchase with Android Pay, this token is used to create yet another temporary token to complete a purchase.”

After launch, Android Pay will support in-store payments in more than 1 million checkout stands in the U.S. that currently work with Android Pay. Besides adding more stores, Google will enable in-app payments via Android Pay. The feature, according to the Android Pay developers website, is coming soon. “Android Pay requires no changes to your payment processing,” reads Google’s invitation to developers wishing to integrate Android Pay into their apps. Apparently, Google will offer developers the possibility to channel all sorts of payments in their apps through the enhanced authentication and security features of Android pay, and leave the rest as it is.

“Leading payment gateways and processing platforms are also adding support to make it even easier for developers to enable Android Pay,“ says Google. Bitcoin-friendly companies Braintree and Stripe are among the payment processors integrating Android Pay in their platforms.

It is also possible that Bitcoin wallet and payment apps developers will integrate Android Pay. According to information currently available, it appears that Bitcoin operators will be able to do so.

“We are doing it in a way so that anybody else can build a payments service on top of Android,” Sundar Pichai – who was announced as the next Google CEO in August – said in March. That seems to imply that any external Bitcoin service will be able to integrate Android Pay. More will be known when further details of the Android Pay developer program are released.