Google revamps smartphones with Pay and Buy

Google is launching Android Pay, a direct rival to Apple Pay, allowing mobile shoppers to buy directly through Near Field Communications), while it also announced integration direct payment on mobile ads on smartphones.

The company announced the contactless payment system at its annual I/O conference for  software developers, replacing Google Wallet. It will enable shoppers to use their smartphones for real world purchases, simply by unlocking the phone.

To protect information, Android Pay can also be used with fingerprint recognition software and the system will pass numbers between the customer and store that relate to a person’s credit card details but not the card number itself. The launch was in the US but the system is expected to be rolled out to Europe later this year.

The addition of Buy Now buttons to its search results is set to transform the mobile shopping experience, potentially dramatically. The buttons will be linked from search results on a smartphone to a Google transaction page, where users complete their purchase.

Of course, these buttons will only be usable by consumers signed into their Google account on a mobile device. What makes the approach interesting is that Google will be the one to retain payment details, rather than the retailer.

According to a number of reports, after the first purchase is made, Google will hold onto the relevant information, making future purchases much quicker. The system has added mobile privacy controls that could be appealing to shoppers (ensuring that apps only gain permission to access data on a case by case basis) but could create challenges for marketers, as they lose a touch point with the consumer, and potentially lose ownership of their sales data. The other impact is a loss of merchandising control and upselling opportunities.