Paying with Google: An Exciting Prospect, Again

Paying with Google: An Exciting Prospect, Again

Last week in the Google I/O developer conference, Google made a number of interesting payments-related announcements. I would encourage anyone interested in this to look at the full video online, but here are some highlights and my takeaways. Google has discussed:

  • Google Payment API, which enables merchants to let their customers check out via any cards stored with Google. When the customer is ready to check out, they hit a "Pay with Google" button and are presented with the available payment options – any cards they have in their Google account they may have registered to pay for apps and services in Google Play or YouTube. Importantly, it also includes cards registered via Android Pay. Google is piloting this API over the the next few months and is partnering with the leading payment service providers, such as Braintree, Stripe, Vantiv, ACI, Adyen, First Data and Worldpay, to take it to market. This will work in-apps, via the browser, and via Google Assistant.
  • Google Shopping API to integrate into Google Home, and ability to build Purchase Actions with Google Assistant. In the example shared by the executives on stage, customers can talk via the Assistant to Panera, request an item, and pay for it via a card stored on the Google account while authenticating with their fingerprint. They also showed how the Gmail Send Money function can now be triggered via a voice command, bringing P2P payments capability to the Assistant. In the future, there are plans to onboard other P2P providers.
  • Loyalty enrollment, engagement and redemption support for in-store merchants. Participating merchants will allow customers to save their loyalty programs directly to Android Pay, get notifications of available offers via Android Pay, and redeem via Smart Tap, a service for which Google partnered with First Data and its Clover platform.

At the foundational level, Android Pay continues to make international inroads. It is already available in 10 markets, and is launching soon in Brazil, Canada, Russia, Spain, and Taiwan. Also, one of the most important features (in my view) is something that is already available today, yet perhaps didn't get enough acknowledgement in the market when launched – the push provisioning API. Issuers that integrate push provisioning API allow their cardholders to add cards into Android Pay directly from their mobile banking apps. More importantly, the user can get all the benefits of Android Pay without having to download and set up the Android Pay app itself. Certainly, that's one adoption barrier less to worry about. Bank of America, bnz, Discover, mBank, USAA, and Westpac are among the first banks that have integrated push provisioning API.

This is not the first time that Google made interesting announcements around payments – back in 2011, Google Wallet generated a lot of excitment among all of us following mobile payments. It appears that the latest API-driven approach with Android Pay as the foundation makes 'paying with Google' an exciting prospect again.

Viewing mobile payments strategy holistically

Viewing mobile payments strategy holistically
As the one year anniversary of Apple Pay approaches, banks have to make more decisions about their mobile payments strategy. Android Pay launched in the US a few days ago, and Samsung Pay is expected to be available there soon as well. Should a bank just stick with Apple Pay or enable their cards with all the “pays?” Should they consider alternative options, such as their own HCE-based, or depending on the market, even SIM-based NFC solutions? The answer is that banks have to view their mobile payments strategy holistically. Apple Pay, good as it is, is only available for the latest iOS devices, and only for in-store and in-app payments. Android ecosystem offers more choice: Android Pay, Samsung Pay, HCE and SIM for NFC, but what about P2P and other payments? Barclays in the UK announced this week that it will be launching its own version of mobile payments for Android-based phones. Barclays was a notable absentee when Apple Pay launched in the UK, and are forging ahead with Pingit and bPay wearables. As a result, some view this latest move as yet another indication that the bank “appears to be adopting a go-it-alone strategy with its roll-out of mobile payments, preferring to retain the primary contact with the customer rather than providing the rails for interlopers like Apple, Google and Samsung to hitch a free ride.” I wouldn’t read too much into it. Barclays has since said that it would support Apple Pay at some point in the future. In my view, Barclays is doing what all banks should do – think about mobile payments holistically, i.e. how they will support mobile payments across different platforms and use cases (e.g. in-store, in-app, P2P, etc.). Yes, Android Pay has been launched in the US, but it’s not yet available in the UK. Yet HCE technology has given banks around the world an opportunity to launch their own branded NFC solutions for Android, irrespective of whether Android Pay is available in their market or not. Rather than waiting for Android Pay or Samsung Pay to come to the UK, Barclays is joining the growing list of banks such as BBVA in Spain (read the case study of BBVA Wallet, our Model Bank winner here), RBC in Canada (who were granted a patent for their Secure Cloud payments earlier this month), and others that are taking a proactive stance in developing mobile offerings for their Android user base. I have a new report coming out soon that covers key digital payments issues, such as Android Pay and tokenisation in more detail. Watch this space!