Google to launch new payment API Android Pay

Reports suggest the launch of a new payments API, dubbed Android Pay, is imminent.

wallet-herocnet.jpg
CNET
Google is set to launch a new payments API called Android Pay at the firm's I/O conference in May.

A source close to the matter told Ars Technica that the new application programming interface (API) will grant companies the option to add in-store and in-app payments to third-party applications.

Android Pay will act as a platform for customers to add and store their credit card data and make purchases with a single click. In addition, according to the publication, companies which adopt Android Pay will be able to use the API for tap-to-pay transactions in traditional, physical outlets.

The new API will rely on Google's Host Card Emulation (HCE), which allows an Android application to emulate a card and talk directly to NFC chip readers, rather than being emulated by a separate, Secure Element chip embedded within a device.

Google already offers a payment service called Google Wallet. The free online payment service is a platform for web users to store credit cards and acts as a virtual card to make online payments or to send funds to other users. The Google Wallet Card can also be used in physical outlets if your Android device is set up for NFC payments.

According to Ars Technica, Android Pay will be "built from the ground up" for developers using HCE in comparison to Google Wallet's structure and system. However, Google Wallet will continue to exist and will support Android Pay. This type of functionality in turn will give customers the option to link their Google Wallet to third-party apps which have Android Pay integrated.

While Google Wallet currently offers a number of APIs including the "Instant Buy" setup -- which allows Android developers to bolt-on "Buy with Google" buttons in applications -- this new, extended functionality is likely to appeal to companies exploring the potential of apps and contactless payments for both physical and digital stores.

The easier you make new technological advances, the more likely firms -- especially SMBs -- will consider adoption, especially if new services could increase revenue streams. In today's connected world where Western consumers demand seamless transactions and contactless, digital payments are becoming more widespread, offering such options may become crucial to businesses in the future.

Google is far from the only tech giant exploring mobile payments. Apple, for example, unveiled the Apple Pay mobile payments service in September last year. The NFC-based system has been adopted by a number of companies over the past six months, allowing iPhone 6 and iPhone 6+ users to make contactless payments.

See also: Apple ordered to pay $533 million in iTunes infringement lawsuit

On Tuesday, financial services firm JP Morgan Chase firm released statistics related to its credit card business and said over one million wallets on the Apple Pay platform had been provisioned. The firm said users of Apple Pay tended to be younger with higher incomes.

This week, Morgan Stanley announced Apple's mobile payment service would be available for use by Wealth Management clients.

In addition, Google revealed the acquisition of SoftCard technology and patents this week. The mobile wallet service, backed by three large US wireless providers, will now be swallowed up by the tech giant -- giving Google another weapon in its arsenal to go up against Apple Pay, which is ahead of the game due to a large number of partnerships.

Google declined to comment on the report.

Read on: In Google's world