The big payoff Android Pay could bring to app developers

Shane Schick

There's a world of difference between the names "Google Wallet" and "Android Pay," and it all comes down to what some of those worlds mean in the physical rather than the digital world.

A wallet is something you fill up with money, credit cards, personal identification and other odds and ends like receipts. It's something you have to manage, and from a security perspective, it's a liability. To pay, on the other hand, describes a transaction that leads to something you want to do: see a movie, get an item of clothing or eat some great food. If nothing else, Google has learned from Apple about how to market this kind of functionality to the market.

Perhaps even more importantly, however, was Google's announcement that, along with the promise of an NFC-based system that would compete with Apple Pay, the forthcoming Android Pay will not be locked down as a new kind of secret sauce controlled entirely by the platform provider. Instead, Google is opening up the mobile payment opportunity to developers, which means a lot of potential changes to Android apps over the next few years. 

In some respects, this may seem in keeping with the more open source nature of Android than the proprietary practices of Apple. It's much bigger than that, however. Google's move will mean Android developers can not only provide payment features or payment-based apps, but that they will gather priceless information about buying habits and purchase patterns across a wide range of consumer and business scenarios. This unlocks even more potential to disrupt a market that has been largely owned by firms like PayPal, and, to surprisingly successful extent, Starbucks. 

There will be reasons to hope for major innovation from the best app developers with Android Pay. There will also be all the other trade-offs associated with Android. These include inconsistent user experiences across the platform, and possibly concerns about how security holes that tend to plague Android will further contaminate associated payment apps. 

With Apple Pay only recently hitting retail stores, Google's timing with Android Pay gives its developer ecosystem some assurance that there will be plenty of room left to deepen relationships with customers via mobile payments, which by their nature breed a particular kind of loyalty and engagement that arguably could go well beyond what you see with most mobile games. 

Android Pay doesn't merely set the agenda for Google I/O this May. It throws down a gauntlet to Apple and anyone else who believes that the facilitation of purchases will become an integral part of using mobile devices, whether it's a smartphone, tablet or a range of wearable gear. It's making a long-term commitment to the future. In other words, it's like money in the bank.--Shane