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Three’s a crowd: Android Pay joins competitive mobile payment market

Android PayAndroid Pay
Android Pay payment screen. Courtesy of Google

Google is poised to re-enter the mobile payment race with a new platform called Android Pay.

The payment service will be released later this year and similar to digital wallets offered by Apple and Samsung. Users running Android 4.4 KitKat O/S or higher on their mobile devices will soon be able to pay for products by tapping their smartphone against payment terminals.

While using the service, an Android Pay user’s credit and debit card numbers are randomized and stored securely in the cloud. A process, called tokenization is also used to send a single-use number to complete transactions. In laymen terms, your actual card number is never stored on your phone or in the cloud. If you lose your device, you can wipe any and all payment information using Google’s Android Device Manager application.

The digital wallet will also be available within applications installed on Android devices. Lyft, a popular ride-sharing service, was used to demonstrate Android Pay integration at Google’s annual I/O conference. After an individual requests a ride through the app users will be able to simply tap on a pay button to complete the transaction.

Despite the benefits Android Pay offers, a lack of password or PIN prompts before payments are processed raises security issues. Without password requirements it means, in theory, anyone with access to your unlocked device can pay for purchases at any time using Android Pay.

When I asked a Google representative about this seemingly obvious misstep, I was told that the company will require all Android Pay-enabled devices be secured using a lock screen pattern, PIN code, or fingerprint. However, it doesn’t plan to force users to authorize each purchase.

In contrast, both Apple Pay and Samsung Pay — which will be available in late 2015—require authentication at time of payment (even if the device is already unlocked).

The latest offering from Google adds to the increasingly competitive world of mobile payment options and therefore begs the question, are there too many competing programs out there? In short, I don’t think so. From a consumer’s point of view, all three products offer consumers more options at the checkout stand, which is a good thing.

The biggest difference (and arguably most important) between the three solutions is that Android Pay will offer rewards to those who regularly use the service and be pre-installed on AT&T, Verizon, and T-Mobile devices when it launches.