Report: Google to launch Android Pay API at I/O to spur mobile payments adoption

Google (NASDAQ: GOOG) is going to unveil a new API called Android Pay at its I/O developer conference in late May, according to an Ars Technica  report, and the platform will enable payments in brick-and-mortar stores and in-app payments for third-party applications.

The report, citing an unnamed source familiar with the plan, said that Android Pay will let companies add a mobile payments option to their apps, and users will be able to upload credit card or debit card information to enable payments via a single tap within apps.

Additionally, a company that uses the Android Pay API will be able to allow tap-to-pay transactions in physical stores and will use Google's version of Host Card Emulation (HCE), which will make it easier for apps to take advantage of Android phones' Near Field Communications (NFC) chips. HCE is a cloud-based payment service that bypasses the secure element embedded in the hardware of a phone.

A Google spokesman could not be reached for comment.

In contrast to Google Wallet, the Android Pay API will be "built from the ground up" for Android developers, using HCE, the report said, citing its source. According to the report, Google does not yet have any Android Pay partners and Google Wallet will continue to exist as a separate offering and will be supported by Android Pay. Customers will be able to link their Google Wallet account to third-party apps that are running Android Pay.

Developers can use Google Wallet APIs to let consumers buy items from their apps, but the new Android Pay API would let consumers buy goods without using Google Wallet and developers will not need to use Google Wallet APIs.  

The new API, along with Google's recent acquisition of mobile payments firm Softcard, indicate that Google feels it must respond to Apple (NASDAQ: AAPL), which  late last year introduced its Apple Pay service, as well as other mobile payments offerings. Further, Samsung Electronics last week acquired LoopPay, and said it plans to integrate LoopPay's payments technology onto its forthcoming phones. Meantime, the Merchant Customer Exchange, which is a mobile payments alliance among retailers like Target and Walmart, plans to soon release its CurrentC payment service. And PayPal and others continue to work to stand out in the mobile payments space.

Earlier this week Google (NASDAQ: GOOG) announced that it acquired Softcard, the mobile payments joint venture backed by Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE:T) and T-Mobile US (NYSE:TMUS). As a result, Google Wallet will now be pre-installed on Android phones (running KitKat or higher) sold by these carriers in the U.S. "later this year," Google said.

"Softcard has completed a deal with Google to bring together leading technologies to advance mobile wallets. Google has acquired Softcard technology and capabilities to power the next generation of mobile payments," Softcard announced on its website. "For now, Softcard customers can continue to tap and pay with the app. We will share more information with customers and partners in the coming weeks."

It appears Softcard is going to soon shut down its Android and Windows Phone apps. Softcard said in a FAQ page that is encourages "Android users to download Google Wallet. In the near future, the Softcard app will shut down and all wallets will be terminated. A specific termination date will be provided soon."

"The Softcard for Windows Phone app will also be terminated. A specific termination date will be provided soon," Softcard added.

For more:
- see this Ars Technica article 
- see this Softcard FAQ
- see this VentureBeat article
- see this GigaOM article

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