Apple Pay is still fresh. Samsung Pay is even fresher having been unveiled just a day ago. Google has a response to both: Android Pay. And it uses NFC, just like the two (though Samsung Pay does support those non-NFC legacy terminals as well).
Unlike the two which are outright payments services that their respective owners will do anything within their power to lure as many users and merchants to, Android Pay will seek to be different. It will act more as a platform than an mobile payments application on your device. It will be a layer on top of which developers can build payments solutions. A layer at the operating system level that can be accessed by anyone to make it easy to pay for goods and services using your Android device. There will be an API for third party developers to plug in and add the Android Pay functionality to their Android applications and other shopping apps and services. Heck, Google is even said to be exploring ways it can work with Samsung Pay.
“We are doing it in a way in which anybody else can build a payments service on top of Android. So, in places like China and Africa we hope that people will use Android Pay to build innovative services.” – Pichai
Like Apple Pay and Samsung Pay, Android Pay will encrypt data and store it on your device so that even Google doesn’t have access to your sensitive data. Tokens will be used for generating one-time transaction codes that the merchants and financial institutions involved will have access to. Samsung and Apple’s mobile payments services use biometrics for user authentication so what about Android Pay? It will support that as well. Does that mean a future Nexus device with a fingerprint scanner to showcase the service? Cross your fingers. That could be an I/O away.
With Android Pay, what happens to Google Wallet? According to Sundar Pichai, Google’s VP for Products, who broke news of Android Pay at the ongoing Mobile World Congress in Barcelona, Wallet will stay on and it will use it (Android Pay) as a form of payment. Remember that Wallet is an application while Pay is like a platform. The application will run on the platform. Simple as that.
Details about Android Pay are still blurry but we expect to hear more about it and even a possible launch during I/O 15 in May.
Additional info: Cult of Android