How Android Pay works as an app is based on a very simple concept. Just like we can use debit and credit cards issued by banks to shop around, Android Pay lets you do the same but it does the same job directly through your smartphone rather than from a number of bank cards. It works through an integration between Android Pay’s secure APIs and Google’s existing Host Card Emulation (HCE) functionality. When you set up Android Pay on your phone, Visa or MasterCard will generate a digital token which will be used to make payments in stores. Not only will the token protect your bank account or credit card details, it will also include all the benefits and guarantees of a transaction with a physical card.
Even though Android Pay has some way to go before you can use it literally everywhere, including drawing cash from ATMs and also comes with a £30 limit for single transactions, it offers Android phone users the opportunity to perform contactless transactions at retail stores and transportation systems just like their iOS counterparts have been doing for the last ten months. Apple Pay was welcomed with open arms by iOS device users last year and during the second half of 2015, it powered over three million journeys on the London Transportation system and continues to add more than 1,000 unique transactions on the transportation system every day. Apple Pay was launched in July last year and was supported by major banks like HSBC, Nationwide, American Express, First Direct, Natwest, RBS and Ulster Bank. The payment system is also compatible with high street retailers like Costa Coffee, Starbucks, Waitrose, Nando's, Subway, KFC and many more.
Android Pay first launched in the United States back in September of last year and is compatible with Visa, MasterCard, American Express and Discover cards. When launched, it was accepted at more than 700,000 retail outlets in the United States and has brought in numerous banks, retailers, mobile carriers and payment networks to participate in the programme, ensuring a universal platform for Android phone users to make contactless payments in future.
Like with Apple Pay, you will be able to store your credit cards, loyalty cards and other sensitive information in your phone through which you will be able to perform transactions from your phone.What makes it so simple, and therefore popular, is that its two factor authentication is extremely secure as well as easy to perform. While it normally uses fingerprint ID to verify transactions, it can also use a passcode in phones which do not feature fingerprint sensors.
However, Android Pay's journey in the UK will not be as smooth as Google may believe. Even though it won't be a direct rival of Apple Pay as the latter doesn't work in Android devices, it may have to content with Samsung Pay which will launch in the UK later this year. Back in July of 2015, Samsung joined hands with MasterCard to launch its contactless payment system across the globe starting with the United States and South Korea. MasterCard's MDES technology enables tokenization of credit, debit, co-brand, prepaid and small business cards for use in e-wallet services. The Magnetic Secure Transmission (MST) system in Samsung Pay also generates a magnetic field that links up with that of the card readers to facilitate the flow of information and works in around 90 per cent of sale terminals in the United States. Thanks to MST, Samsung Pay is compatible with older credit card terminals as well which is not the case with Android Pay or Apple Pay.
Android Pay will be available to everyone using Android phones running Android 4.4 KitKat or later versions of the operating system. Users of iOS, Windows or BlackBerry 10 devices will not be able to use Android pay as of now. However, your Android phone should also have NFC and HCE capabilities to be able to run Android Pay.