Google Comes Back with Android Pay

Google began its roll out of Android Pay earlier this week, marking the search giant’s reenterance to the mobile payments arena. By next week, most people running Android 4.4 KitKat on their phones should see the Android Pay app in the place of Google Wallet.

Almost exactly a year ago, Apple released the iPhone 6, which included Apple Pay. Apple Pay was designed to blow Google Wallet out of the water. It came with tighter security and greater adoption of technology such as near-field communication (NFC). Android Pay is also head-and-shoulders above Google Wallet, though it’s not necessarily better than Apple Pay. Still, it’s similar enough to be a formidable competitor – which is necessary, according to Cyriac Roeding, chief executive of shopping companion app Shopkick.

“Not everyone has an iPhone. Just like we have two operating systems for our smartphones, we’re going to have at least two operating systems for our mobile payments,” Roeding points out. “That’d be like saying, ‘We have a Ford car, so nobody else needs to make cars anymore,’ or ‘There’s no need to make seatbelts because Ford already has them.’ I hope [Google and Apple] both win so we’re able to kickstart this market.”

While Google promises to add new retailers and banks regularly, the platform’s participants aren’t as extensive as those for Apple Pay. As a result, some users may lose the ability to tap and pay. The increased security from Android Pay doesn’t allow you to link any debit card, rather it requires participation from Google partners.

Josh Engroff, chief digital media officer at The Media Kitchen, points out that this isn’t Android’s only disadvantage. Android Pay will come pre-loaded on all AT&T, Verizon, and T-Mobile smartphones running Android Lollipop and all subsequent system updates. Apple Pay also comes pre-loaded on Apple devices.

“Android Pay’s approach to security is not much different than Apple Pay’s, and therefore also not a competitive advantage. Both pass secure tokens to merchants, keeping the actual credit card number hidden,” Engroff says. “The challenge for Android is that since it doesn’t control the hardware layer completely like Apple does, different handset makers with their own payments solution may claim their method is more secure than Android Pay’s. That is already happening with Samsung.”

Engroff says that mobile payments aren’t significantly more convenient than pulling out a credit card. He thinks they have potential beyond transactions.

“Where it will get really interesting is when they work across all apps on a user’s phone,” he says. “Then Apple Pay and Android Pay both become extremely convenient services available to all apps, which eliminates the need to enter payment info into different app environments. This is true whether for in-app purchases of virtual goods like mobile games or physical goods like Amazon delivery.” 

Rodeing agrees, adding that mobile payments can become a piece in the loyalty programs, ultimately creating the best possible experience for a consumer in-store.

“After all this, the next step needs to be a focus on what happens before the payment,” he says. “That’s where the problem is. You don’t know what to buy, you don’t know what the discounts are, and nobody knows you’re there to greet you.”

Currently Android Pay is limited to physical stores – McDonald’s, Walgreens, Whole Foods, Staples, and Subway are among its early adopters. It will be expanded to include purchases within Android apps later this year, though Google hasn’t specified when.

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