Google to launch Android Pay

Google is expected to launch a payments application programming interface at its I/O conference in May

Google is expected to launch payments application programming interface (API) Android Pay at its I/O conference in May.

The API will allow developers to add mobile payments to their apps to enable in-store and in-app payments, reported website Ars Technica.

Google is investing in its mobile payments offering in the face of fierce competition from Apple and potentially increasing competition from Samsung.

Google recently said it is working with US telcos to boost its mobile wallet app Google Wallet, which will come pre-installed on Android phones sold by US telcos AT&T Mobility, T-Mobile US and Verizon Wireless.

The internet giant is also acquiring technology and intellectual property from Softcard, the mobile software company owned by the telcos.

In the US, the Apple Pay mobile wallet was responsible for 1% of digital payments in the US in November 2014, just a month after its launch, according to the ITG Mobile Payments report. In comparison, despite being established in 2011, Google Wallet only accounted for 4% of payments in the same month.

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  • Internet giants will not try to replace banks but will disrupt the sector through other services that take consumers away from traditional banks, says analyst firm Forrester
  • Google has announced the UK availability of a service that allows people to make payments using Gmail, 18 months after its US launch
  • Google has moved further into the field of financial services information enrichment with the launch of a free mortgage calculator which lets consumers compare mortgages from different finance firms

Samsung recently acquired mobile payments startup LoopPay in a challenge to Apple’s fledgling mobile payments business. Samsung is expected to present the acquistion when it launches its next smartphone in March 2015.

Since the launch of Google Checkout (which recently merged with Google Wallet) in 2006, Google has been acquiring, partnering and investing in firms in areas of financial services, such as payments, comparison and loyalty cards.

In its Why Google Bank Won’t Happen report, analyst firm Forrester said the high costs and strict regulation of setting up a traditional bank – alongside advertising revenue coming from banks – will push internet firms into roles that support the relationship between banks and their customers. 

These roles could include transactional payment services, financial advice, money management and product comparisons.

"Google’s reputation as one of the most disruptive firms in the market has left many digital financial services executives worried about a potential new rival: Google Bank," said Forrester analyst Oliwia Berdak.

According to an IT source in the financial services sector, Google has the capability to do anything it wants, so if it want to get into payments, it will probably succeed.

“It already offers some services so I presume they see a way to leap ahead of the card market and go fully electronic," he said. "No cards are needed if you have details stored online and can identify yourself at payment. Maybe Visa and MasterCard are in its sights."

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