Google Launches Android Pay to fix Google Wallet Lapses

Last week, Google announced Android Pay—a way to pay from your phone. No need for credit cards; you will be able to pay contactlessly for goods and services using your Android smartphone. Sounds great—but also kind of familiar. Didn’t Google Wallet already do that? it’s hard to understand what was so new.

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The big difference—barely discussed at the Google I/O developer conference—is that AT&T, Verizon, and T-Mobile will preinstall Android Pay on phones when the service is ready later this year. According to Osama Bedier, the former PayPal exec who oversaw the creation of Google Wallet and now runs the payments startup Poynt, this is the big thing Google Wallet was missing—and the big thing that could make an Android-based payments service (and mobile payments in general) take off.

With Android Pay, you won’t need the app. You won’t need to enter a pin. It’s built right into the operating system. If you’ve unlocked your phone, you just place it up against the credit card terminal, and boom, you’re done. It’ll even automatically prompt you to use a loyalty card or gift card if you have one.

Android Pay is Google’s do-over, and it works a lot like Apple Pay (Apple’s entry into the payments space last year has ignited a new race from technology companies to capture a slice of the potentially lucrative market). It is built into Android M and will work with major credit and debit cards to make purchases in more than 700,000 brick and mortar stores in the U.S. However, Android Pay will not exist as a standalone app, like Apple Pay on an iPhone. Instead, it will be used by third-party apps to create payment products such as store- or payment provider-specific apps, acting as a payment source as well as a credit card replacement.

It’ll also be able to make use of the native fingerprint scanner recognition coming in Android M, though Android Pay should work with NFC-equipped devices sporting Android 4.3 and above.

Where does that leave Google Wallet? Google Wallet will continue to exist, but will integrate Android Pay as a payment source.

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