ANZ Bank steals march on big competitors with Android Pay

ANZ Bank has announced the launch of Google's Android Pay, believing it will mark the start of a long-term relationship with the tech giant.

The launch gives ANZ customers the option to use their smartphone running on Android 4.4 or higher to pay at checkouts by unlocking their phone and holding it to a terminal that accepts contactless payments.

The transaction works using near-field communications technology, and relies on tokenisation security to generate a unique number for each purchase to ensure customer card details are never shared directly with the retailer.

ANZ customers will have the option to pay using their visa debit or credit card, or an American Express credit card, with the bank saying it is "actively" working on shortly bringing Mastercard into the mix.

According to ANZ chief Shayne Elliott, adding Android Pay to the contactless payment portfolio -- where ANZ currently offers its proprietary ANZ Mobile Pay and Apple Pay -- will give ANZ customers more choice, which is a key goal for the bank.

"We have customers who are really passionate and want to have a bank-branded wallet that gives them a sense of security and that's what they like, and then we have a whole bunch of other customers who really feel totally secure and love their mobile device whether it's an Android or Apple. Ultimately, it's about giving choice and so we have to support all of those platforms, and we will continue to do so," he said.

"Our proprietary wallet is successful and there is a market for that, and it will continue to be the case."

The idea of giving customers choice echoes an important objective for Google, with Pali Bhat, Google senior director for product management, saying there are plans to partner with more banks in Australia -- large and small.

"We want to offer our customers choice, and choice means they can use any Android device they choose that supports NFC payments ... so we support all users' favourite phones. We also want to offer choice in supporting the bank they already use, and of course we want to support choice in terms of the merchants they want to shop at," he said.

The move by ANZ to work with Google to introduce Android Pay also builds on the company's recent hire of former Google Australia and New Zealand managing director Maile Carnegie, who officially started her role as group executive for digital banking this month.

"ANZ and Google can really work together. We have a really good partnership. As you know, we recently hired Maile who's from Google to work our digital team, and part of that attracted us was the Google culture, the openness, the experimentation. I'm really confident we'll get this going and then we'll move onto the next thing together," Elliott said.

Other banks supporting Android Pay include American Express, Macquarie Bank, MyState, and Teachers Mutual Bank. Bhat said there are plans to launch with more banks down the track, including St George and Westpac.

Ben Perham, head of personal banking for Macquarie's Banking and Financial Services Group, said Macquarie cardholders will be able to use their Android device to make contactless payments on their credit cards.

"Offering Android Pay is the latest step in Macquarie's approach of supporting innovative digital solutions to make banking simpler and more convenient for our customers," he said, adding that Android Pay will be available to its debit cardholders in the coming weeks

7-Eleven, Coles Express, Coles Supermarkets, Domino's Pizza, Donut King, and McDonald's are among a handful of initial retailers that are supporting Android Pay in Australia.

In a few days, according to Google's blog, customers will also be able to check out using Android Pay on apps including Catch of the Day, Deliveroo, EatNow, and Kogan.com.

Google first announced it was going to launch Android Pay in the country at the end of last year. It follows in the footsteps of Apple Pay, which launched in Australia last year, and Samsung Pay that arrived to the country in June.

However, in Google's defence, Bhat said that while it may appear to have entered into a so-called established contactless payment market in Australia, it's still early days, describing it much like a long cricket test match where it's "first ball in the first over of the first innings".