The battle over mobile payments got a little more awkward this week in a way that only Google can accomplish. At the company's annual developer event, Google announced not one but two new mobile payment platforms. Yes, you read that right: Google appears to have launched two competing payment systems on the same day.
First is Android Pay, the payment system we all knew was coming thanks to Google's purchase and subsequent shuttering of Softcard. While we knew about the platform, we now know details. The system will be an open API available within Android M, allowing developers to integrate functionality into their apps. This will allow for NFC or in-app purchases all through a single platform, meaning a single place to store your payment information.
Google will be taking after Apple in the way they transfer data between the device and the merchant, using a token system. What is not known at this time is exactly what will be contained in this token: whether it will be like Apple Pay's alleged token description, which passes a tremendous amount of information, or if it will more appropriately transfer a transaction identifier instead, preventing the retailer from having or needing the actual card. Considering that Google is using Host Card Emulation (HCE), it is likely that Android Pay will not be any more secure than Apple Pay.
Google Hands Free
Shortly after receiving this information, Google showed off Google Hands Free, a prototype for another payment system. This one, however, seems to skip the Android part and, instead, makes the payment via magic. The process uses no direct device transfer, but instead allows you to pay simply by saying that you'd "like to pay with Google." While very little information was given about how this works, it was said that McDonald's and Papa John's would be the prototype test partners. Also, a video was shown which felt a little more like an infomercial than a real product.
In addition to Android Pay and Google Hands Free, Google Wallet will continue to exist, but will take on a new purpose: personal payments. It would appear that Wallet will be living in the same realm as most banks' mobile apps, allowing you to transfer funds from one person to another directly. Unless limitations are places on how much can be transferred, Wallet could compete against Android Pay for smaller merchants, such as food trucks, who could transfer without the credit card percentage.