Everything You Should Know about Android Pay

Android has had NFC payments since way back in 2011 with the Sprint Nexus S 4G. In the intervening years Google Wallet’s usage hasn’t exactly rocketed upward, and then Apple Pay happened. To offer a more full-featured alternative for Apple Pay, Google announced a revamped version of its payment platform at I/O this year — Android Pay. This new way to pay via NFC is now rolling out to devices, but what’s different other than the name? Here’s everything you should know about how Android Pay works.

Separating Wallet and Pay

Before you can start using Android Pay, you’ll need to receive an update to Google Play Services. That’s the framework that makes all your Google apps and services work. It should happen automatically in the background in the coming weeks, and when it does, the Play Store will update your Wallet app, turning it into Android Pay.

Going forward, Android Pay is your NFC payment app and Wallet is for sending money to others.

So the new Android Pay app is actually the same package name that Wallet was using before, which is why it completely overwrites it. Wallet still exists, but it’s a new app listing in the Play Store, and it’s not for paying in stores. From now on, Android Pay is your NFC payment app and Wallet is for sending money to others via your Wallet balance, as well as managing your Wallet debit card.

This is very narrow functionality for each app, and I’m really not sure why Google bothered separating them. Couldn’t the money sending just be bundled into Pay? At any rate, you’ll need to open Android Pay to set everything up, and that’s where things get tricky.

Setting Up Android Pay

Android Pay works much more like Apple Pay in that your bank or card issuer needs to have explicit support for it as a payment method. If it’s not supported, you can’t add the card to Android Pay. There are a fair number of banks already on-board with Pay including USAA, BoA, Wells Fargo, and more are on the way. Still, it’s not all of them and odds are that a small regional bank or credit union will never support Android Pay.

Upon opening Android Pay, you’ll be informed that a secure lock method is required. This was not the case with Google Wallet, which relied only on the 4-digit PIN to secure your payments. That means to continue setting up Android Pay you need a pattern, PIN, password, or fingerprint lock. Some of the more exotic unlock methods, like LG’s Knock Code are not supported.

You might be wondering if you’re completely out of luck in the event your card issuer isn’t on-board with Android Pay yet. Well, sort of. You can’t add any new cards from unsupported banks. If you had an unsupported card in Google Wallet previously, you’ll be able to temporarily grandfather that in by confirming the security code. There are conditions, though.

This really gets to the heart of how the old Wallet and Android Pay differ. When you grandfather an unsupported card into Android Pay, it is added as a virtual MasterCard. That’s how Google Wallet used to work, which is why you could add any card (more on this later). Google has said this virtual card option will only be available for a limited time. How limited? That’s unclear, but it looks like you need to do the virtual card add on each device individually. So if you get a new phone, you’ll have to hope the virtual card is still offered. This is really just a stopgap, though. If your bank doesn’t support Pay, you’re eventually going to be locked out.

Using Android Pay

The easiest way to use Android Pay is to go into your system settings and set it as the default payment method. That way you can simply hold your phone up to the payment kiosk and it will launch Pay and process your default card. You’ll need to enter your secure lock before this happens, though. You can also set Android to prioritize the foreground app for payments, wo you can still use something like Samsung Pay if you explicitly launch it first.

Android Pay will also be a payment option in apps, but this feature is coming later. Basically, your phone will push your payment details and shipping info right to the app with a single tap. There isn’t even a real demo of this functionality yet, though, so we don’t know exactly how it will work.

Aside from credit and debit cards, you can add gift cards and loyalty programs to Android Pay. Simply tap the plus button and select the type of card you want to add. If you’ve got a physical card with a barcode, the app can use your camera to instantly copy it into Android Pay. Otherwise, you can enter the numbers manually.

Are you wondering why Google is working with banks to implement Android Pay as described above? It becomes apparent when you actually use it — it’s all about transaction metadata. When you process a transaction with a virtual card, all your account sees is a generic purchase from Google. Credit card companies want the transaction data, and they didn’t like that Google Wallet obscured it. This also meant you couldn’t get any sort of reward points for purchases (because there was no metadata attached), and it was also a huge hassle to decipher what each transaction was if you needed to go back later.

With Android Pay, purchases are processed with your real card number and will display in your account properly. So you get points and proper transaction details, but card support is limited. This is inconvenient (especially right now), but it was probably the only way forward for Google.

Android Pay still has a lot of growing to do, but it’s not like Google Wallet was hugely popular. Being allied with banks at least means Google isn’t in this alone anymore. If mobile payments on Android are going to work, Android Pay will have to be how that happens.


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