Today, Google announced Android Pay, its new attempt at mobile payments. Although initially it looked like Android Pay would be some kind of lower-level layer on top of which other payments apps can live, it now looks likes it's actually more of a replacement for Google Wallet.
This means that Google is still pushing its own solution over competing payments services that exist on Android, such as Samsung Pay. Google Wallet will still exist ,but it will be relegated to facilitating peer-to-peer payments between users.
The good news is that for devices that come with Android M and later, Android Pay will work with your fingerprint, just as Apple Pay does. Google has standardized the fingerprint authentication software for smartphones that come with Android M, so that should make it much easier for future devices to use fingerprint readers in a secure way.
Android Pay also supports tokenization, an industry standard supported by all the major payments networks in the U.S., including American Express, Discover, MasterCard and Visa. This represents a major security and privacy feature that was first supported by Apple in the mobile payments market.
The merchants only get randomly generated virtual credit card numbers, as opposed to your actual credit card number. This means they also don't have to worry about protecting your card information, because they will never receive it. If you ever lose your phone, or it gets stolen, you can use Google's Device Manager to lock the device or wipe the sensitive information on it.
Apps will now be able to integrate the Android Pay API to let users pay for goods and services with their mobile phones. Android Pay will be supported by 700,000 store locations and over 1,000 applications, according to Google.
With select retailers, royalty programs and rewards will be automatically applied at checkout. For instance, when you buy a Coke at a vending machine, the MyCokeRewards will be applied.
The Android Pay application will be available on the Play Store soon and will work with devices that support KitKat and beyond, although for easy fingerprint authentication you'll need Android M on your device. NFC (near field communication) is of course needed as well, as that's how the smartphones can communicate with merchants' equipment. All devices that are sold by Verizon, AT&T and T-mobile should come pre-installed with Android Pay in the U.S.
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