Google product czar Sundar Pichai officially confirmed reports that the company is working on a mobile payments API (application program interface) called Android Pay at Mobile World Congress on Monday.
That makes three tech giants with similar sounding payments efforts — we’ve got Apple Pay, Samsung Pay, and now Android Pay.
Although they sound the same, the three are different in important ways.
Here’s the basics about what you need to know about each:
Apple Pay and Samsung Pay have a similar purpose, will work in different places
The main purpose of both Apple Pay and Samsung Pay is to let you buy things in physical stores using your phone.
Apple Pay only works on the company’s latest iPhones in retailers with near-field communication (NFC) technology. Over 200,000 retailers support Apple Pay, but not every retailers’ sales system supports NFC.
Samsung Pay will also only work with the company’s latest phone, the S6. However, Samsung’s phones will work with NFC technology but also standard magnetic credit card readers, thanks to its recent acquisition of LoopPay. Because most U.S. retailers already have magnetic strip readers, more will automatically be able to accept Samsung Pay (the company says that 30 million merchant locations globally already have the potential to work with Samsung Pay).
“Apart from this key distinction between the two payment products, Samsung Pay largely has the same product attributes as Apple Pay,” according to Evan Bakker, research associate for BI Intelligence.
Apple Pay launched in October and Samsung Pay will launch this summer, but both rely on shoppers using their fingerprint to authenticate purchases and neither Apple nor Samsung will have any access to information about what users bought or how much they paid.
Android Pay is a platform, not a product that people will use in stores, like Apple Pay and Samsung Pay
Since 2011, Google has offered a mobile wallet app that shoppers can use at some retailers with NFC technology.
But unlike “Google Wallet,” Android Pay is is not a product.
Instead, it’s an API layer in Android that will be able to power in-app and in-store mobile payments capabilities for any Android-based app. Google Wallet, for example, will be powered by Android Pay’s technology.
In that way, Android Pay isn’t strictly a competitor to either Samsung Pay or Apple Pay. At Mobile World Conference, Pichai said Google will try to ensure that Android Pay and Samsung Pay can “align” and said the two services were being rolled out on different timelines.
Google wants Android Pay to become a successful platform because it would be a simple way for the billion people who use Android phones to pay for things — Pichai called out China and India as places where he hopes to see developers build “innovative services” with Android Pay.
It would also potentially mean offline purchasing data for Google that it could use to better target its online ads (a key distinction between Google Wallet and Apple or Samsung Pay is that Google “sees” every transaction that a user makes).
Since the company launched Wallet in 2011, the service hasn’t quite taken off, but it passed a major hurdle recently it when acquired assets from Softcard, a mobile payments company backed by Verizon, AT&T, and T-Mobile. Now, when you buy a new Android phone from any of the major US carriers, that phone will have the Google Wallet app pre-installed.
Bonus: PayPal may not have “PayPal Pay” but it just made a huge mobile payments acquisition
Although PayPal doesn’t have a product with a cookie-cutter name, Re/code reported on Monday that the company is buying the startup Paydiant for $US280 million.
Paydiant powers the Apple Pay, Samsung Pay, and Google Wallet competitor, CurrentC. CurrentC, which will launch this year, is the mobile wallet of a consortium of big-box retailers including Wal-Mart, Target, and 7-Eleven. By buying Paydiant, PayPal comes hard into brick-and-mortar mobile payments as a retailer’s ally.
As Re/code’s Jason Del Rey explains it:
Many retailers don’t want to be beholden to a dominant payments service, whether it’s from Apple or Google. Ultimately, some may decide it benefits them to have other players such as PayPal offering alternatives.