Google launches its Apple Pay competitor, Android Pay

May 28, 2015

At its I/O developer conference on Thursday, Google shared more details on its mobile payments plans and revealed a new product: Android Pay.

Android Pay allows users of mobile phones equipped with Google's mobile operating system, Android, to upload any credit or debit card to a "mobile wallet" on their phone. They can then use their phone to pay for goods at more than 700,000 retail stores in the U.S. that have point-of-sale registers equipped with near field communication technology, known as NFC. The result? A one-touch digital payment.

Participating retailers include Whole Foods, Macy's, and Walgreens.

On its surface, Android Pay looks a lot like Apple Pay, which launched last year to allow consumers to pay for items by touching their iPhone to a retailer's point-of-sale device. As with Apple's offering, developers can use the Android Pay system to power payments within their apps. For example Lyft, the on-demand transportation company, will support Android Pay as a way to pay for rides within its namesake app.

Android Pay will also incorporate fingerprint biometrics to authenticate payments, similar to the way Apple Pay allows authentication using its Touch ID technology. You'll be able to use fingerprint authentication both within apps and at physical retail stores. Google says Android Pay is secure because it never shares the actual card number with merchants.

For Google, Android Pay represents its big push into controlling the mobile digital wallet. Forrester, the market research firm, forecasts that mobile payments will top $142 billion by 2019, up from $67 billion this year.

Android Pay will be made available for U.S. Android users in the upcoming months.

Google has spent years developing solutions for the mobile wallet. It launched Google Wallet in 2011 as a way to pay for goods with Android phones. But the search giant's previous mobile payments play faced challenges in massive adoption. In many ways, Android Pay is the evolution of Google Wallet, which also used NFC technology at launch.

Google also said that it will be integrating with select loyalty programs and these special offers will be automatically applied at checkout. Apple is reportedly working on a loyalty program in Apple Pay that is expected to be revealed at the company's WWDC developer conference in a few weeks.

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