Google I/O: Android Pay may help resurrect Google Wallet, but it may not mean much for India

Last year Apple announced its new contactless NFC-powered mobile payments system with the iPhone 6, and it wasn’t surprising to see Google quickly follow suit and introduce (without giving away any details) the new Android Pay at MWC earlier in March. Samsung soon followed suit. Mobile payments have been around for quite sometime now, and these new additions will only help it further pick pace. Earlier at MWC 2015, Android czar Sundar Pichai spoke about an ‘API layer’ that will allow other companies to support secure payments for Android in apps as well as physical stores. Finally, Android Pay was announced at the Google I/O. Android Pay will help merchants accept credit card payments from their mobile apps and also at brick-and-mortar stores. Unlike Apple, it also plans to add loyalty points for those who use Android Pay. It brings together mobile carriers, payment networks, banks and retailers to allow smartphone users to use their handsets instead of payment cards.

Much like the Apple Pay system unveiled last year, Android Pay will allow consumers to store credit card information on their handsets along with loyalty cards and other data. For **extra security** , Android Pay will generate a one-time “token” or virtual account number so the actual credit card data is not revealed in a transaction. Google Wallet will become a pre-installed “tap to pay” app on Android smartphones. “Android Pay will soon be accepted at over 700,000 store locations from your favorite brands across the US, and in over 1000 Android apps. And we’ll be adding more every day,” Google said in its official blog. It is also bound to bring some big changes to the struggling Google Wallet launched in 2011 and can be called one of the biggest announcements to come from I/O. India, an emerging market with Android dominance, is important for Google, and it may well go ahead and launch Android Pay here too. However, Android Pay may not mean much for India. Just like Apple Pay, Android Pay allows contactless payment using NFC for tap-and-pay services. The NFC chip fitted within the devices will help transmit payment information between the merchant, buyer and the bank, authenticated by a PIN. Having said that, one of the primary need becomes an NFC-enabled device. The Indian mobile payments market is still at a nascent stage and mobile payments have a long way to go. Considering the push that was needed to take credit card payments and internet banking mainstream, there’s a long way to go before mobile payment across merchants could become a reality. There’s also the fragmented device market in the Android ecosystem, a large population with differing needs, several regulatory constraints and multiple payment modes that go well beyond credit cards. Considering Android dominates the low to mid-range segment, the larger chunk of the Android market in India largely consists of devices roughly priced between Rs 5,000 to Rs 15,000, and most of them do not support NFC. Nonetheless, the tech innovation is a welcome and we believe getting Apple and Google to create feasible means of carrying out such transactions will only get more financial companies and banking institutions to create solutions that cater to the needs of a unique emerging market such as India.