Google Announces Mobile Payments Platform Android Pay

At the Mobile World Congress event in Barcelona, Google's GOOGL +1.54% senior vice president of Android, Chrome and Google Apps Sundar Pichai announced an upcoming mobile payments framework called Android Pay. Android Pay will not be a separate payment app, but it is going to be a platform that enables developers to integrate mobile payments into their apps using an API layer.
“We are doing it in a way so that anybody else can build a payments service on top of Android,” said Pichai during the event via The Guardian. “In places like China and Africa, we hope that people will use Android Pay to build innovative services.” Android Pay will be able to act as a payment source within apps and stores that have NFC-capable registers.

Sundar Pichai / Credit: Google

Down the road, Google will enable Android Pay to utilize biometric devices such as fingerprint scanners — just like Apple AAPL +1.08% Pay. Apple Pay can be secured using the Touch ID fingerprint sensors in some of the latest iOS devices to approve transactions. The credit card data of Android Pay users will be stored locally so that payments can be made without a data connection. To prevent fraud, Android Pay will use “tokenized” card numbers — which means that a one-time credit card number will be generated for each transaction.
This past weekend, Samsung announced a biometric-enabled mobile payments system of its own called Samsung Pay. Pichai said that Android Pay is not intended to rival against Samsung Pay. Samsung Pay utilizes a fingerprint scanner to secure payments, which will be built into the new Galaxy S6 and S6 Edge so it essentially competes directly against Apple Pay. Google will work closely with Samsung to determine if there are potential synergies between Android Pay and Samsung Pay.
Google Wallet will remain a separate service, but it will rely on the Android Pay framework. Launched in 2011, Google Wallet failed to gain as much traction as Apple Pay, mainly because it seemed ahead of its time and carriers blocked it from being used when it launched. As Apple Pay grew in popularity over the last few months, the potential for Google Wallet seems to have revived. Last month, mobile payments company Softcard announced it was acquired by Google. As a result of the acquisition, Google Wallet will be pre-installed on Android phones (KitKat or higher) sold by AT&T T +0.92%, T-Mobile and Verizon Wireless.
Visa, MasterCard and American Express will support Android Pay when it launches. It is unknown when Android Pay will become available for the public, but we will likely hear more details during Google’s I/O developer conference in May.

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