Google has unveiled Android Pay, which will allow credit, debit, prepaid and small business cardholders to use their Android-based mobile phones for everyday purchases in-store and within Android apps.
Android Pay, revealed at the Google Developer's Conference in San Francisco, Calif., permits mobile carriers, payment networks, financial institutions and retailers to allow smartphone users to use their handsets instead of payment cards.
Google Engineering Vice President Dave Burke said Android Pay would work in more than 700,000 U.S. retail outlets.
Users can authorize Android Pay transactions at stores and in apps through a new API to standardize fingerprint sensors on Android devices.
"Mobile payments is a big priority for Google, so we've been working with major networks and issuers such as Discover to help provide a seamless experience across a wide range of phones and stores," Pali Bhat, director of product management at Google, added. "Android Pay will offer people further simplicity, security and choice when paying for things with their Android phones."
Similar to Apple's solution, NFC, host card emulation and tokenization keeps credit card and purchase information private. The new payment vehicle available on devices that run KitKat or newer operating systems can also use fingerprint verification, but it is currently not feasible on older devices because of the various different standards and implementations for fingerprint scanners on Android devices.
The Des Moines, Iowa-based TMG's Brian Day, director of digital strategy, said, "With Google's confirmation of Android Pay as an open API, the market became even more exciting. An open API, unlike a proprietary API, paves the way for more developers to build payments functionality into their own apps, including mobile banking apps. TMG has long contended the market winners in digital banking will be those that combine banking and payments functionality. Consumers want one clear view of their complete financial picture. The credit unions and community banks looking to provide that may find an easier path with the release of Android Pay."
In related news, MasterCard and Discover Card announced the unveiling of Android Pay to provide its cardholders with even more options for making payments with their choice of mobile device.
"Mobile payments are here today, and are now an essential part of the core value proposition for new devices," Ed McLaughlin, chief emerging payments officer for MasterCard, stated. "With the MasterCard Digital Enablement Service (MDES) and Android Pay, we can now use secure tokens to easily enable payments from a consumer's connected device. Today's news extends consumer choice and drives further ubiquity of payments on devices."
Heather Roche, vice president of rewards at Discover, said, "Discover's goal is to provide our customers the freedom, options and simplicity of making mobile payments with whatever method they choose. Adding Android Pay expands Discover's ability to enhance the convenience and experience for its mobile users."
The ubiquity of mobile phones is changing the way consumers pay – according to a recent Federal Reserve report, 39% of all mobile payment users with smartphones have made a point-of-sale payment, demonstrating the increased demand for simple and secure ways to make device-based payments.
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
