Google takes on Apple with launch of Android Pay

Google has unveiled its Android Pay app, enabling in-app payments as well as purchases in bricks and mortars stores.

The service is part of Google's attempts to take on Apple, which recently launched its own payments service in the US, Apple Pay, allowing it to compete in an increasingly crowded market. Samsung, for instance, has also announced that it is to launch a rival service folllowing its acquisition of LoopPay eariler this year.

Android Pay, showcased at Google's I/O developer conference in San Francisco, is part of the next version of the Android operating system, dubbed Android M. It will also work with certain handsets using other versions of Android, specifically KitKat and Lollipop.

Like Apple's service, Android Pay will allow app users to carry out transactions in shops by tapping their mobile device against an NFC reader, using a hadnset's fingerprint scanner for authentication. There are currently 700 retail firms in the US ready to accept payments in this manner, including Bloomingdale's, McDonald's and Subway.

The service will also allow in-app purchases, making it easier to order an Uber taxi, for example.

It is not the first time Google has launched a payments service. Its Wallet app provided similar, but more limited functionality. The service is likely to continue to exist, but targeted more specifically at person to person payments. The Wallet is part of a recently launched service that allows payments to be made through its email platform, Gmail.

In its bid to move further into the payments space, Google has partnered with a number of credit card companies as it launches Android Pay, including Visa, MasterCard and American Express, with support from US telecoms firms like T-Mobile, AT&T and Verizon.

The Android Pay app will provide additional functionality, such as the integration of retailer loyalty schemes into payments at point of sale - something Apple is also set to include in its service.

Google claims another differentiator is that Android Pay is open to developers via its API, opening up a broader ecosystem for payments.

However, Ovum senior FST analyst, Gilles Ubaghs, said that Apple has also opened its APIs, and there is little difference between the offerings at present.

"By following Apple Pay so closely, it is probably that Android Pay will suffer the same challenges of limited initial take up by consumers, and the continued dearth of NFC enabled locations in the US," he said.

"It also remains to be seen how Android Pay, will interact with the upcoming Samsung Pay. Overall Google's moves will help to expand the base for mobile payments in the US, but there is nothing in the announced details of Android Pay to suggest any surge in take-up in the near term."


Matthew Finnegan

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