During a keynote session at MWC 2015 Google announced the launch of Android Pay, an API framework that will enable third parties to leverage its capabilities to enhance their own m-commerce applications for Android devices. This take on m-payments is slightly different to consumer-facing services such as Apple Pay, Samsung Pay, and indeed the existing Google Wallet – Google is positioning Android Pay squarely as a platform. However, Android Pay does have some similarities with the consumer services, including the use of NFC for proximity payments, card tokenization, and biometrics for authentication.
Google has suggested that Android Pay would be a particularly good m-payments platform for application developers in emerging markets such as China and Africa. This makes sense, given the growing base of Android smartphones in emerging markets.
The upbeat projections for Android Pay are in sharp contrast to the current position of Google Wallet, which, after four years, is still largely confined to the US, where its installed base is building slowly. Google says it will continue with Google Wallet, which Ovum presumes will in turn use Android Pay’s API framework. However, it remains to be seen whether this and the anticipated benefits of Google’s recent acquisition of Softcard will be enough to give Google Wallet the boost it needs.
The string of recent m-payment announcements from Google is no surprise. The m-payments market is becoming highly competitive. Apple Pay has raised the stakes, forcing its rivals to respond, and the launch of Samsung Pay also poses a challenge. Unfortunately Google’s m-payments strategy is becoming rather muddy just when it needs to be crystal clear. It needs to turn the situation around and achieve the clarity it needs at its forthcoming developer conference in May.
Eden Zoller, Principal Analyst, Consumer Services and Payments
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