Until recently, mobile payments hadn’t made much of an impact in North America. Then Apple Pay came out in full force and CEO Tim Cook aggressively expanded the system over the course of a few short months. Everyone is talking about mobile payments again, including Google, the company who tried to make it happen four years ago. Now it wants back in the game.
First, there was talk that Google will introduce updates to Google Wallet at its developer conference. Then, the company announced that it had purchased mobile payment competitor Softcard and added carrier support for its Wallet. Now, there’s a new service called Android Pay will probably arrive at Google I/O. Here’s everything we know.
Updated on 03-03-2015 by Joshua Sherman: Added news that Android Pay is real and will probably feature more information at Google I/O.
Google confirms Android Pay service coming to Google I/O
Sundar Pichai, Google’s SVP of Product, spoke at MWC 2015 about the future of payments with Google. As far as the company is concerned, the writing is on the wall, and it agrees that it’s time to expand on the humble beginnings of Google Wallet with something even more integrated and versatile.
Google will create a special API for Android Pay, so companies can add the option to pay with Google’s new service in their apps. Users can easily upload credit card or debit card information in the app, to make all in-app transactions single-tap payments. The same tap-to-pay function will also arrive in select stores. It may use Google’s Host Card Emulation (HCE), which enables third-party apps to use the Near Field Communications (NFC) chips in Android smartphones.
Ultimately it’d be up to the OEM and the end user to decide just what they’d use to complete a transaction. Android Pay will facilitate and offer seamless transactions, but it’s your choice to use Google Wallet, PayPal or potentially another application to handle your payments. Google Wallet, for example, will operate as a service that can connect to Android Pay’s platform, just as you’d integrate PayPal or other applications, giving Android users the same seamless experience as Apple Pay they want while the versatility in options. Pichai noted that Samsung’s own payment solution, Samsung Pay, won’t necessarily compete against Android Pay either. This also means that the Google Wallet refresh will come separate from Android Pay’s roll-out.
For now that’s all we know about Apple Pay, though hopefully we’ll get to see some of the new API in action at Google I/O in June. Either way, developers must be very excited about the coming integration technology.
Google snaps up competitor Softcard
On February 23, Google announced that it purchased the mobile wallet app Softcard (formerly known as ISIS), and struck a deal with the three largest carriers in the United States to get Google Wallet on all new Android phones. Every Android phone with Android 4.4 KitKat or higher that’s sold by Verizon, AT&T, and T-Mobile will now come with Google Wallet pre-installed.
Essentially, all the carriers who were once reluctant to work with Google and concentrated their efforts on Softcard instead, have joined together to support Google Wallet. It’s unclear why the carriers all agreed to support Google Wallet now that it’s bought up Softcard, but it’s possible that Google may have offered them a percentage of the revenue. Apple Pay does not work with specific carriers, so none of them get a piece of what’s shaping up to be a very lucrative pie.
One of the factors that limited Google Wallet’s reach in the past was the fact that it wasn’t installed on many phones. It seems that at least this problem will no longer exist for the company’s mobile wallet app.
Google Wallet will get a refresh and new partners
Again, Google Wallet is not going anywhere. Google apparently plans to also refresh, update, and add new features to Google Wallet this May during its Google I/O developer conference, sources told the Wall Street Journal just last week. The company hopes to reign in all the different developers and manufacturers it works with and get them to commit to Google Wallet instead of PayPal, LoopPay, and others. Now that it’s got the carriers, banks and retailers must also be contended with if Google is to succeed in mobile payments.
The company is said to be talking to Visa and Mastercard to work out a deal, which is something that Apple already accomplished. As the list of Apple Pay partners grows, so too, must Google Wallet’s. Currently, banks pay Apple a fee for making payments more secure, and Google may take a similar approach. However, its software, called Host Card Emulation, may make banks upgrade their anti-fraud systems, which could discourage them from joining.
In addition to rounding up more partners and forcing manufactures like Samsung to include Google Wallet on their phones even if they launch their own competitor this year (as they’re rumored to be doing for the Galaxy S6 smartphone), Google is said to be adding new features to its Wallet.
Omid Kordestani, Google’s chief business officer, said that Google will offer a “fully functional payment system” that goes “beyond just tap and pay.” Of course, it’s unclear what that means exactly, though it could involve online purchases, app purchases, and more. Regardless, we hope to find out more in May, but we’ll update this post in the meantime.
Updated on 02-23-2015 by Malarie Gokey: Added news that Google bought the mobile wallet Softcard, formerly known as ISIS, and Google Wallet will come pre-installed on all new T-Mobile, Verizon, and AT&T Android phones.
Updated on 02-26-2015 by Malarie Gokey: Added news that Google may introduce a service called Android Pay with its own API at Google I/O.